For U.S. tax purposes, Enerplus is a corporation, not a partnership or master limited partnership (MLP). Enerplus units are eligible investments for IRAs and are not considered Unrelated Business Taxable Income (UBTI).

For U.S. unitholders, the payments are comprised of dividend and non-taxable return of capital (tax deferred). For most U.S. taxpayers, the dividend portion should be a “Qualified Dividend” eligible for the reduced tax rate. For withholding tax purposes, 2008 estimated taxable income (dividend income) for U.S. residents is 95%. Actual taxable amounts may vary depending on actual distributions, which are dependent upon production, commodity prices and funds flow experienced throughout the year. Actual taxable amounts will be communicated to unitholders via a Form 1099 DIV prepared by their brokers. 

All payments are converted into U.S. dollars on the payment date by the Canadian Depository for Securities. The taxable portion of the distribution is subject to a minimum 15% Canadian withholding tax that is withheld prior to any monies being distributed to unitholders. The non-taxable return of capital portion of the distribution is also subject to a flat 15% withholding tax that is also withheld prior to any monies being distributed to unitholders. Based upon advice from our U.S. tax advisors, where units are held in a cash account, we believe the full amount of all withholding tax should be creditable for U.S. tax purposes in the year in which the withholding taxes are applied.  Where units are held in an IRA, the same withholding taxes apply. In an IRA, the withholding tax is not creditable for U.S. tax purposes.

For purposes of computing any gain or loss arising from the disposition of units, investors are required to reduce the cost base of their units by the amount of the return of capital each year. However, if the full amount of the cost has been recovered, any further non-taxable distributions should be reported as gains.

U.S. Tax Consequences Letter (PDF, 8.0 KB)

Enerplus Resources Fund 2007 U.S. Tax Information (PDF, 23.2KB)

Enerplus Resources Fund U.S. Tax Information Archives