Enerplus Corporation shares are eligible investments for IRAs and are not considered UBTI. Monthly payments made by Enerplus Corproration are 100% comprised of taxable dividends. Dividends to U.S. individual residents are "qualified dividends" eligible for the reduced tax rate. Taxable dividend amounts will be communicated to shareholders via a Form 1099 DIV prepared by their brokers.
If Enerplus shares are held in a taxable U.S. account, the dividend is subject to a minimum 15% Canadian withholding tax that is withheld prior to any monies being paid to shareholders. U.S. investors may be able to receive a foreign tax credit with respect to this withholding tax. Where shares are held in an IRA, withholding tax should not be applicable.
Shareholders are advised to consult their tax advisors regarding questions relating to the tax treatment of Enerplus dividends and the computation of the cost basis of their investment in Enerplus.
Archived Tax Letters for Enerplus Corporation & Enerplus Resources Fund