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TSX-BAD.UN
CALGARY, March 6 /CNW/ - Badger Income Fund today released information necessary for 2006 Canadian tax reporting. The information provided below is solely to assist Canadian individual unitholders with tax reporting information in respect of distributions paid and declared during the calendar year 2006. Canadian unitholders should consult with a taxation or investment professional for individual tax advice.
Trust Units Held Within an RRSP, RRIF, RESP or DPSP
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No amounts are to be reported on the unitholders' 2006 Income Tax Return where Trust units are held within a Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF), Registered Education Savings Plan (RESP) or a Deferred Profit Sharing Plan (DPSP).
Trust Units Held Outside an RRSP, RRIF, RESP or DPSP
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Unitholders who hold their Trust units outside of an RRSP, RRIF, RESP or DPSP and were entitled to receive distributions on a distribution record date within the calendar year 2006 will receive a T3 Statement of Trust Income Allocations and Designations slip ("T3") directly from Computershare Investor Services or from the broker/intermediary who the unitholder holds their Trust units through. The amount reported in Box 26 "Other Income" on the T3 should be reported on the Unitholders' 2006 Income Tax Return. The deadline for mailing the 2006 T3's to unitholders, as required by the Canada Revenue Agency, is March 31, 2007.
Adjusted Cost Base of Trust Units for Capital Gain Purposes
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Unitholders are required to reduce the adjusted cost base ("ACB") of their Trust units by the amount reported in Box 42 "Amount Resulting in Cost Base Adjustment" of the T3, which is equal to the cumulative distribution declared during calendar 2006 less the amount reported as "Other Income" in Box 26 of the T3. The ACB is used in determining the capital gain or loss on the disposition of Trust units.
Schedule of Tax Treatment of 2006 Distributions
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The following schedule details the cash distributions declared in 2006 and the tax treatment of each distribution per Trust unit for income tax purposes:
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Tax
Taxable Deferred
Amount Amount Total
Record Date Payment Date (T3 - Box 26) (T3 - Box 42) Distribution
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January 31/06 February 15/06 0.08526 0.01274 0.0980
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February 28/06 March 15/06 0.08526 0.01274 0.0980
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March 31/06 April 17/06 0.08526 0.01274 0.0980
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April 28/06 May 15/06 0.08526 0.01274 0.0980
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May 31/06 June 15/06 0.09135 0.01365 0.1050
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June 30/06 July 15/06 0.09135 0.01365 0.1050
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July 31/06 August 15/06 0.09135 0.01365 0.1050
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August 31/06 September 15/06 0.09135 0.01365 0.1050
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September 29/06 October 16/06 0.09135 0.01365 0.1050
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October 31/06 November 15/06 0.09135 0.01365 0.1050
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November 30/06 December 15/06 0.09135 0.01365 0.1050
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December 29/06 January 15/07 0.09135 0.01365 0.1050
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Badger Income Fund is an open-ended trust that is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Our key technology is the Badger Hydrovac, which is used primarily for safe digging in congested grounds and challenging conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. Badger manufactures its truck-mounted hydrovac units.
Badger Income Fund's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Badger Corporate works with its Operating Partners to provide Hydrovac service to the end user. In this partnership, Badger provides the expertise, the trucks, and North American marketing and administration support. The Operating Partners deliver the service by operating the equipment and developing their local markets. All work is invoiced by Badger and then shared with the Operating Partner based upon a revenue sharing formula. In limited locations Badger has established corporate run operations to market and deliver the service in the local area.
This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Badger to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, fluctuations in the market for oil and gas related products and services, political and economic conditions, the demand for services provided by Badger, industry competition and Badger's ability to attract and retain key personnel.
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
TSX-BAD.UN
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March 6, 2007
BADGER INCOME FUND RELEASES UNITED STATES TAX INFORMATION
Calgary, Alberta - Badger Income Fund today released information necessary for 2006 United States ("U.S.") tax reporting. We believe for U.S. federal income tax purposes, that the units of Badger Income Fund more likely than not will be properly classified as equity in a corporation, rather than as debt, and that dividends paid to its individual U.S. unitholders will more likely than not be qualified dividends. As such, the portion of the distributions made during 2006 that are considered dividends should qualify for the reduced rate of tax applicable to certain capital gains.
The portion of the trust distributions that is considered a dividend for U.S. income tax purposes is determined based upon the greater of Badger Income Fund's current or accumulated earnings and profits ("E&P") as determined in accordance with U.S. income tax principals.
With respect to cash distributions declared in 2006 to U.S. individual unitholders, 100 percent should be reported as qualified dividends.
Badger Income Fund is not required to issue Form 1099 DIV's; however, U.S. unitholders may have previously received a Form 1099 DIV from a broker or intermediary that may not be correct. As a result of this, U.S. unitholders should consult their brokers and tax advisors to ensure that this information is accurately reflected on their tax returns. Brokers and/or intermediaries may or may not be required to issue amended Form 1099 DIVs. Readers should consult their own legal or tax advisors as to their particular tax consequence of holding Badger Income Fund units.
Canadian resident taxpayers should note that the above information has no impact on any disclosed Canadian tax information.
Badger Income Fund is an open-ended trust that is North America's largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. Our key technology is the Badger Hydrovac, which is used primarily for safe digging in congested grounds and challenging conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. Badger manufactures its truck-mounted hydrovac units.
Badger Income Fund's business model involves the provision of excavating services through two distinct entities: the Operating Partners (franchisees in the United States and agents in Canada), and Badger Corporate. Badger Corporate works with its Operating Partners to provide Hydrovac service to the end user. In this partnership, Badger provides the expertise, the trucks, and North American marketing and administration support. The Operating Partners deliver the service by operating the equipment and developing their local markets. All work is invoiced by Badger and then shared with the Operating Partner based upon a revenue sharing formula. In limited locations Badger has established corporate run operations to market and deliver the service in the local area.
This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Badger to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, fluctuations in the market for oil and gas related products and services, political and economic conditions, the demand for services provided by Badger, industry competition and Badger's ability to attract and retain key personnel.
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
%SEDAR: 00020566E