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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area
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To: Paul Senior who wrote (24575)11/2/2006 9:15:26 AM
From: allevett  Read Replies (1) of 37387
 
Paul Senior,

Pretty much my feelings regarding the Trusts.

"Hotline: Important Canadian Trust News" from Forbes
Newsletter Group
Date: Wed, 1 Nov 2006 21:57:11 +0000 [View Source]

Canadian Income Trusts

This morning the Canadian government announced proposed tax changes that apply to Canadian Income Trusts. The government is concerned about losing too much tax revenue since more companies are deciding to convert from regular corporations to the income trust structure.

Their solution is to start taxing income trusts for the first time. The tax will apply immediately to new income trusts; existing income trusts will be exempt until 2011. The government plans to tax trusts in much the same way it taxes corporations. U.S. shareholders, who pay a 15 percent withholding tax on their trust dividends, will be paying a tax rate of 41.5 percent in 2011.

There have been previous attempts to change the tax laws pertaining to trusts in the past two years and both times, they were never actually implemented. Our thinking is that five years is a long way off and political pressure
will likely delay the tax further or kill it altogether. Today's announcement should roil the income trust market and present some excellent buying opportunities.
Recommendation:
Buy recommended Canadian Income Trusts on steep price drops: Provident Energy Tr (PVX), PrimeWest Energy Tr (PWI), Harvest Energy Tr (HTE), Penn West Energy Tr (PWE), Canetic Resources Tr (CNE), Enerplus Resources (ERF)
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