FRONT STREET CAPITAL FLOW-THROUGH TAX GUIDE Spring 13

Transcription

1 SPRING 13 FRONT STREET CAPITAL FLOW-THROUGH TAX GUIDE 2012 Spring Yonge Street Suite 600 Toronto, Ontario M5E 1G4

2 Dear Limited Partners: Front Street 2010 LP I, Front Street 2010 LP II, Front Street 2011 LP I, Front Street 2011 LP II, Front Street 2012 LP I (National Class), Front Street 2012 LP I (Québec Class) & Front Street 2012 LP II We are pleased to provide this booklet on the preparation of your 2012 Income Tax return. The information contained in this booklet is not intended as tax or legal advice from Front Street Capital. A tax professional is recommended and we advise you to obtain professional tax advice on your individual circumstances. Please provide this to your tax preparation professional. The tax slips themselves will be provided to you directly from your brokerage firm where your account is located, likely in late March or early April, Front Street Capital provides this information to assist you with the preparation of your 2012 and subsequent years individual income tax returns and is based on information and tax forms available at the time of writing. The information contained herein is strictly for information purposes only and should in no way be regarded as tax advice. Yours truly, Front Street Capital FRONT STREET CAPITAL Tax Guide 2012 Tax Year

3 FRONT STREET CAPITAL FLOW-THROUGH TAX GUIDE 2012 TABLE OF CONTENTS Section I 1 FRONT STREET FLOW-THROUGH 2012 TAX INFORMATION 1 Statement of Partnership Income (T5013) 2 Statement of Partnership Income Relevé -15 (RL -15) Section II 3 PRIOR YEAR FLOW-THROUGH INFORMATION 3 After-Tax Rate of Return 3 Maturing Information 3 Distributions Section III 4 ADJUSTED COST BASE 4 ACB of Front Street Partnership Units 5 Front Street 2010 LP I & Front Street 2010 LP II Calculation 6 Front Street 2011 LP I & Front Street 2011 LP II Calculation 7 Front Street 2012 LP I (National Class), & Front Street 2012 LP I (Québec Class) Calculation 8 Front Street 2012 LP II Calculation Accountants and/or Tax Professionals FILING INSTRUCTIONS FOR T5013 & RELEVÉ -15 (RL -15) Section IV 9 CLAIMING UNAMORTIZED BALANCE OF ISSUE COSTS 9 Schedule of Partnership s Unamortized Balance of Issue Costs Available for Deduction 9 Deductible Partner s Schedule Section V 10 FEDERAL CLAIMS T5013 s 10 Limited Partner s At Risk Amount BOX Canadian & Foreign Net Business Income (Loss) BOX Limited Partnership Loss Available for Carry Forward BOX Partnership s Total Gross Income BOX Income Interest BOX Actual Eligible Dividends BOX Carrying Charges BOX Capital Gains (Loss) BOX Total Cost of Units BOX Claiming Canadian Exploration Expenses, Canadian Development Expenses BOX 120 & Claiming the Federal Investment Tax Credit (ITC) BOX 128 FRONT STREET CAPITAL Tax Guide 2012 Tax Year

4 TABLE OF CONTENTS -continued Section VI 12 PROVINCIAL CLAIMS T5013 s Accountants and/or Tax Professionals FILING INSTRUCTIONS FOR T5013 & RELEVÉ -15 (RL -15) Ontario Residents: Claiming the Ontario Share Tax Credit -Expenses Available for Ontario Tax Credit BOX 45 British Columbia Resident: Claiming the British Columbia Mining Share Tax Credit -Expenses Qualifying for British Columbia Tax Credit BOX 141 Manitoba Filers: Claiming the Manitoba Exploration Tax Credit -Expenses Qualifying For Manitoba Tax Credit BOX 144 Saskatchewan Filers: Claiming the Saskatchewan Mineral Exploration Tax Credit -Expenses Qualifying for Saskatchewan Tax Credit BOX 143 Section VII 14 PROVINCIAL CLAIMS RELEVÉ (RL 15) 14 Québec Residents 14 Net Canadian & Foreign Business Income (or Loss) BOX 1 14 Actual Amount of Eligible Dividends & Actual Amount of Ordinary Dividends BOX 6A, 6B 14 Interest From Canadian Sources BOX 7 14 Capital Gains (or Losses) BOX 10 or Gross Income (or Gross Loss) of the Partnership BOX Carrying Charges BOX At-Risk Amount BOX Limited Partnership Loss BOX Total Cost of Units BOX Claiming Canadian Exploration Expenses BOX Québec Development Expenses BOX Québec Exploration Expenses BOX Renewable and Conservation Expenses BOX Québec Development Expenses BOX Québec Exploration Expenses BOX 62 Québec Exploration Expenses & 16 Québec Surface Mining and Oil and Gas Exploration Expenses BOXES 62 & Exploration Expenses Northern Quebec BOX Security Issue Expenses BOX Amounts of Assistance BOX 66 FRONT STREET CAPITAL Tax Guide 2012 Tax Year

5 SECTION I FRONT STREET FLOW-THROUGH 2012 TAX INFORMATION Statement of Partnership Income (T5013) The following table outlines the 2012 allocations on a per unit basis for the Front Street Partnerships for the taxation period ended March *Note: On T5013 Box 51 & 52, dividends received are 100% eligible dividends. Tax slip(s) [T5013/RL-15] will be sent to you directly from your broker. Box Description T5013 Box No LP I 2010 LP II 2011 LP I Partnership Information (per Limited Partnership Unit) 2011 LP II 2012 LP I National Class 2012 LP I (Québec Class) SPRING LP II At-Risk Amount 22-1 $ $ $ $ $ $ $ Net Business Income (Loss) 22 ($ ) ($ ) ($ ) ($ ) ($ ) ($ ) ($ ) Partnership s Total Gross Income 34 ($ ) ($4,320,767.00) ($53,608,922.00) ($11,643,035.00) $220, $27, $ Interest Income 50 $ $ $ $ $ $ $ Actual Canadian Dividends (Other Than Eligible) 51 Actual Eligible Dividends 52 $ $ $ $ $ Foreign Dividend and Interest Income 55 $ $ Carrying Charges 59 Capital Gains 70 $ $ $ $ $ Foreign Tax Paid on Non-Business Income 81 CEE 120 $ $ $ $ Cdn Development Expense Renunciation 121 $ $ Expenses Qualifying for ITC (Individuals Only) 128 $ $ $ Expense Reduction Portion Subject Int. Free 130 Expenses Qualifying for B.C. Tax Credit (B.C. Individuals) 141 $ $ $ Expenses Qualifying for SK Tax Credit (SK Individuals) 143 $ Expenses Qualifying for MB Tax Credit (MB Individuals) 144 $ $ Expenses Qualifying for ON Tax Credit (ON Individuals) 145 $ $ $

6 SECTION I FRONT STREET FLOW-THROUGH 2012 TAX INFORMATION Statement of Partnership Income Relevé -15 (RL -15) The following table outlines the 2012 allocations on a per unit basis for the Front Street Partnerships for the taxation period ended March *Note: On T5013 Box 51 & 52, dividends received are 100% eligible dividends. Tax slip(s) [T5013/RL-15] will be sent to you directly from your broker. Box Description Relevé -15 Box No LP I 2010 LP II 2011 LP I Partnership Information (per Limited Partnership Unit) 2011 LP II 2012 LP Ntl 2012 LP Que 2012 LP II Net Business Income (Loss) 1 ($ ) ($ ) ($ ) ($ ) ($ ) ($ ) ($ ) Partnership s Total Gross Income 14 ($ ) ($4,320,767.00) ($53,608,922.00) ($11,643,035.00) $220, $27, $ Actual Canadian Dividends (Other Than Eligible) 6B Actual Eligible Dividends 6A $ $ $ $ $ Interest Income 7 $ $ $ $ $ $ $ Foreign Dividend and Interest Income 8 $ $ Capital Gains (Used to calculate the deduction) 10 $ $ $ $ $ Capital Gains (Not used to calculate the deduction) 12 ($ ) ($ ) ($ ) ($ ) Carrying Charges 15A Foreign Tax Paid on Non-Business Income 17 At-Risk Amount 26 $ $ $ $ $ $ $ Eligiible Taxable Capital Gains Amount On Resource Property 45 $ $ $ $ $ Tax Shelter 52 CEE 60 $ $ $ $ Cdn Development Expense Renunciation 61 $ Québec Exploration Expense (Individuals Only) 62 $ $ Québec surface mining exploration or Oil & gas exploration expenses 63 $ $ Exploration expenses Northern Québec 64 $ Security Issue Expenses 65 $ FRONT STREET CAPITAL Tax Guide 2012 Tax Year tax returns and is based on information and tax forms available at the time of writing.

7 SECTION II After-Tax Rate of Return Table I A PRIOR YEAR FLOW-THROUGH INFORMATION After-Tax Rates of Return Front Street After-Tax Rates of Return Value at Maturity After-Tax Rate of Value at Maturity After-Tax Rate of Issues Issues (Issue Price $25) Return (Issue Price $25) Return 2004 LP I $ % 2010 LP I $ % 2005 LP I $ % 2010 LP II $ (8.7%) 2006 LP I $ % 2011 LP I $ (45.7%) 2006 LP II $ % 2011 LP II $ (34.9%) 2007 LP I $ (64.0%) 2012 LP I National 2008 LP I $ % 2012 LP I Québec 2009 LP I $ % 2009 LP II $ % Maturing Information: January 31, 2013 Rollover Date Maturing : Front Street 2011 LP I Front Street 2011 LP II Rollover Mutual Fund: Front Street Resource Class Series B* The Front Street partnerships are rolled into the Front Street Resource Class*, which is part of a Corporate Class structure where a switch between the fund classes listed below can be done without triggering the capital gains. The rollover from the partnership to the mutual fund is a non-taxable event. Series B, Front End mutual fund class units are issued in exchange for flow-through shares. Table II A Maturing Information Front Street Mutual Funds Limited (Series B) & Fund Codes Front Street Resource Class* FSC401 Front Street Special Opportunities Class FSC451 Front Street Tactical Equity Class FSC411 Front Street Growth & Income Class FSC461 Front Street Diversified Income Class FSC421 Front Street Global Opportunities Class FSC471 Front Street Money Market Class FSC431 Front Street Value Class FSC491 Front Street Growth Class FSC441 Distributions Distributions paid into the Front Street rollover mutual fund to date: Table III A Distributions Distributions per Unit Pay Date Fund Name Distribution Reinvestment Amount NAV Dec 31,2006 Front Street Rollover Fund $ $ Dec 31,2007 Front Street Resource Opportunities Fund $ $ Oct 31, 2008 Front Street Resource Opportunities Fund $ $ Dec 31,2009 Front Street Resource Fund $0.00 $0.00 Dec 31,2010 Front Street Resource Fund $0.00 $0.00 Dec 31,2011 Front Street Resource Fund $0.00 $0.00 Dec 31, 2012 Front Street Resource Class $0.00 $0.00 FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

8 SECTION III CAPITAL GAINS IN THE 2 ND YEAR? ADJUSTED COST BASE Front Street flow-throughs allocate any capital gains earned in the portfolio each year, usually in the 2 nd and 3 rd (stub) year on T5013 s. In years past, flow-throughs normally would not have any capital gains reported on the T5013 s and only after the flow-throughs rolled into the mutual fund and were redeemed were any capital gains triggered. The reasons for the capital gains is this: there is activity in the flow-through portfolio during the second year. Our portfolio manager has to begin liquidating the securities in time for the rollover of the flow-through into the mutual fund. Often there is takeover activity in the industry as well, causing involuntary dispositions. As a result, capital gains are usually triggered. ADJUSTED COST BASE IS NOT $0.00 When we report capital gains on the T5013 slip, this should be added to your adjusted cost base. In fact, all income and expense items reported on this slip affect your adjusted cost base, which makes it important that you keep track of them. Therefore, when units in the mutual fund is redeemed, tax will not have to be paid twice on the same income. ACB of Front Street Partnership Units As At March 2013 On the rollover date of the Front Street, you are deemed to dispose of your units in the Partnership for proceeds equal to and to have acquired Units of Front Street Resource Class at a cost equal to the ACB of your partnership units. Therefore, it is considered to be a non-taxable event. Table I A outlines the ACB per rollover unit of the Front Street Partnership based on information available to us. Please be advised your individual circumstances may result in an ACB per unit that is different from what is outlined below. Table I -A Year ACB per Unit Final ACB per Final ACB per Final ACB per LP Unit Rollover Unit Year LP Unit 2004 LP I $ $ LP I $ $ LP I $ $ LP II $ $ LP I $ $ LP I $ $ LP II $ $ LP II $ $ LP I $ $ L P I National * * 2008 LP I $ $ LP I Québec * * 2009 LP I $ $ LP II * * 2009 LP II $ $ *Is currently unavailable at the time of this writing. Final ACB per Rollover Unit Front Street ACB Calculation Table II outlines the ACB per Front Street Resource Class unit of the Front Street Partnership based on information available to us. The ACB of an LP unit is the sum of the original cost, LESS the expenses we "allocate" via the T5013 slip the first year, PLUS any income we allocate in year two, AND in the final stub year. The vast majority of time will have the client's ACB at zero after the first year, as we'll eliminate their $25 / unit ACB with expenses. The moment we add the 2012 final capital gains and those that we earned for January 1, 2013 to rollover date January 31, 2013, we will have the "final ACB". We'll then divide this by the "rollover ratio". This will occur each year for every Front Street LP they will essentially have a three tax year life span. As soon as we get the financials done for each fund, and have the 2012 factors, we'll be able to fill in the blanks for clients and we'll post it on the website. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

9 SECTION III ADJUSTED COST BASE (Cont d) Table II A Front Street 2010 LP I ACB Calculation Front Street 2010 LP I Description Amount per LP Unit ACB after 2010 flow-through expense roll out $ Cdn & Foreign Business Income -$ Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense -$ $ Income Allocation: Cdn & Foreign Business Income -$ Capital Gains $ Canadian Dividends, Interest, etc. $ Income Allocation: $ Cdn & Foreign Business Income -$ Capital Gains $ Canadian Dividends $ $ Unused start up costs avail for future years -$ ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio ACB per Rollover Unit post 2012 $ Table II B Front Street 2010 LP II ACB Calculation Front Street 2010 LP II Description Amount per LP Unit ACB after 2010 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends $ $ Unused start up costs avail for future years -$ ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio ACB per Rollover Unit post 2012 $ You are advised to obtain professional tax advice on your individual circumstances. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

10 SECTION III ADJUSTED COST BASE (Cont d) Front Street ACB Calculation (Cont d) Table II C Front Street 2011 LP I ACB Calculation Front Street 2011 LP I Description Amount per LP Unit ACB after 2011 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends $ $ Unused start up costs avail for future years ($1.6262) ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio ACB per Rollover Unit post January 31, 2013 $ Table II D Front Street 2011 LP II ACB Calculation Front Street 2011 LP II Description Amount per LP Unit ACB after 2011 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense $ $ Income Allocation: Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends ($ ) ($0.3884) Unused start up costs avail for future years ($1.7968) ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio ACB per Rollover Unit post January 31, 2013 $ You are advised to obtain professional tax advice on your individual circumstances. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

11 SECTION III ADJUSTED COST BASE (Cont d) Front Street ACB Calculation (Cont d) Table II E Front Street 2012 LP I (National Class) ACB Calculation Front Street 2012 LP I (National Class) Description Amount per LP Unit ACB after 2012 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) $ Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends, Interest, etc. Canadian Exploration Expense 2014 Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends Unused start up costs avail for future years ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio NOT YET AVAILABLE ACB per Rollover Unit post 2014 NOT YET AVAILABLE $ Table II F Front Street 2012 LP I (Québec Class) ACB Calculation Front Street 2012 LP I (Québec Class) Description Amount per LP Unit ACB after 2012 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($0.5968) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) ($0.0687) 2013 Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends, Interest, etc. Canadian Exploration Expense 2014 Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends Unused start up costs avail for future years ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio NOT YET AVAILABLE ACB per Rollover Unit post 2014 NOT YET AVAILABLE $ You are advised to obtain professional tax advice on your individual circumstances. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

12 SECTION III ADJUSTED COST BASE (Cont d) Front Street ACB Calculation (Cont d) Table II G Front Street 2012 LP II ACB Calculation Front Street 2012 LP II Description Amount per LP Unit ACB after 2012 flow-through expense roll out $25.00 Cdn & Foreign Business Income ($ ) Capital Gains $ Canadian Dividends, Interest, etc. $ Canadian Exploration Expense ($ ) ($0.0459) 2013 Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends, Interest, etc. Canadian Exploration Expense 2014 Income Allocation: NOT YET AVAILABLE Cdn & Foreign Business Income Capital Gains Canadian Dividends Unused start up costs avail for future years ACB per Unit of LP Prior to Rollover $ Formula ACB of a Rollover Unit equals: ACB for LP Unit /Rollover Ratio = Initial ACB for Rollover Unit Rollover Ratio NOT YET AVAILABLE ACB per Rollover Unit post 2014 NOT YET AVAILABLE $ You are advised to obtain professional tax advice on your individual circumstances. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct

13 SECTION IV CLAIMING UNAMORTIZED BALANCE OF ISSUE COSTS Schedule of Partnership s Unamortized Balance of Issue Costs Available for Deduction Front Street s limited partners of record at the date of dissolution of the partnership are entitled to claim a deduction, on their 2012 and subsequent years income tax returns, in respect of the unamortized balance of issue costs incurred by the partnership. To determine the total deduction available in 2012 and beyond, multiply the deduction per unit amount outlined below for the respective taxation year by the number of corresponding partnership units you owned immediately before the dissolution. Report the total amount available for deduction on line 232 Other deductions, on page 3 of the T1 General Income Tax and Benefit Return. For Québec residents only, report the total amount available for deduction on line 250 Other deductions, on page 2 of the Québec Income Tax Return. Table I Deductible Partner s Schedule Taxation Year Front Street 2005 LP I 2006 LP I 2006 LP II 2007 LP I 2008 LP I 2009 LP I 2009 LP II 2010 LP I 2010 LP II 2011 LP I 2011 LP II 2012 LP I National 2012 LP I Quebec 2012 LP II $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ **Important *** Please retain this schedule for use in preparing your individual income tax return in future taxation years. No additional information/reminder will be mailed to you with respect to these Deductions. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Oct 2013 tax returns and is based on information and tax forms available at the time of writing. 9

14 SECTION V FEDERAL CLAIMS T5013 s PART A Canadian & Foreign Net Business Income (Loss) Box 22 This amount represents your share of partnership net income (loss) for the 2012 fiscal period ended March This amount should be reported in Part III, Net Partnership Income (Loss) of Schedule 4. The total amount in Part III should be reported on line 122, page 2 of your 2011 T1 General Income Tax and Benefit Return. Limited Partner s At-Risk Amount Box 22-1 This amount represents a partner s original cost of partnership interest plus or minus certain adjustments. A limited partner cannot deduct partnership losses in excess of their at-risk amount. This amount is used by taxpayers and Canada Revenue Agency to determine the limit to which you can deduct losses and resource expenses, as well as any investment tax credits that may be claimed. It is not reported in the 2012 T1 General Income Tax and Benefit Return. Limited Partnership Loss Available For Carry Forward Box 24 This amount represents your share of the current year limited partnership loss that cannot be deducted. Note: You can only deduct this amount from future partnership income allocations if you have a positive at-risk amount. You can carry forward this amount indefinitely. Partnership s Total Gross Income Box 34 This amount represents the total fiscal 2012 gross income of the partnership. Partners are not required to report this amount in the 2012 T1 General Income Tax and Benefit Return. Interest Income Box 50 This amount represents your share of partnership interest income for the 2012 fiscal period ended March This amount should be reported in Part II, Interest and other investment income of Schedule 4. The total amount in Part II should be reported on line 121, page 2 of 2012 T1 General Income Tax and Benefit Return. Actual Eligible Dividends Box 51 This amount represents your share of the partnership s actual dividends received from Canadian corporations for the 2012 fiscal period ended March The amount in Box 52 will include both eligible dividends and non-eligible dividends. In the Details section, it will indicate the amount of eligible and non-eligible dividends. a. Calculate the taxable amount of eligible dividends by multiplying the actual amount of eligible dividends by The taxable amount of eligible dividends should be reported in Part I, Taxable amount of dividends (eligible and other than eligible) from taxable Canadian corporations of Schedule 4 in either lines 5, 6, or 7. The total amount of Part I should be reported on line 120, page 2 of your 2012 T1 General Income Tax and Benefit Return. b. Calculate the taxable amount of non-eligible dividend by multiplying the actual amount of non-eligible dividends by The taxable amount of non-eligible dividends should be reported in Part I, Taxable amount of dividends (eligible and other eligible) from taxable Canadian corporations of Schedule 4 in either lines 1, 2, or 3. The total amount of taxable non-eligible dividend in Part I line 4 should be reported on line 180, page 2 of your 2012 T1 General Income Tax and Benefit Return. c. Calculate the federal dividend tax credit by adding the federal dividend tax credit of eligible dividends and the federal dividend tax credit of non-eligible dividends. To calculate the federal dividend tax credit of eligible dividends, multiply the taxable amount of eligible dividend portion reported on line 120, page 2 of your 2012 T1 General Income Tax and Benefit Return (i.e. total amount of lines 5, 6 and 7 in Part I of Schedule 4) by %. To calculate the federal dividend tax credit of non-eligible dividends, multiply the taxable amount of non-eligible dividend reported on line 4, Part I of Schedule 4 by %. The federal dividend tax credit amount should be reported on line 425 of Schedule 1. The total amount on line 50 of Schedule 1 should be reported on line 420, page 4 of your 2012 T1 General Income Tax and Benefit Return. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

15 SECTION V FEDERAL CLAIMS T5013 s (Cont d) Carrying Charges Box 59 This amount represents your share of partnership carrying charges related to borrowings of the partnership. This amount should be reported in Part IV, Carrying charges and interest expenses of Schedule 4. The total amount in Part IV should be reported on line 221. The amount of any deductible interest expense you incurred in the year on a borrowing to finance your limited partnership units should be treated in the same way. Capital Gains (Losses) Box 70 This amount represents your share of partnership capital gains for 2012 fiscal period ended March This amount should be reported on line 174, T5, T5013, T5013A and T4PS information slips Capital gains (or losses) of Schedule 3. The taxable capital gains from line 199 of Schedule 3 should be reported on line 127, page 2 of your 2012 T1 General Income Tax and Benefit Return. Total Cost of Units Box 152 This amount represents a partner s original cost of partnership interest. This amount is for reference only and is not reported in your 2012 tax return. PART B CLAIMS 1. Claiming Canadian Exploration Expenses (CEE), Canadian Development Expenses (CDE) Canadian Exploration Expenses & Canadian Development Expenses Box 120 & 121 This amount represents your share of Canadian exploration and development expenses for This amount should be reported in Form T1229 Statement of Exploration and Development Expenses and Depletion Allowance for calculating the maximum CEE and CDE deduction available in 2012 to reduce your federal taxable income for the year, or for future years. a) Report any carry forward balance of Cumulative CEE (CCEE) and Cumulative CDE (CCDE) from the prior year to Area II Box (1) of your 2010 Form T1229. A carry forward would arise if you had any un-deducted CEE or CDE from previous years. b) Report the amount from Box 120 and Box 121 of the T5013 slip to Area I and Area II of Form T1229. c) Report previous year s claim for federal investment tax credit and current year s claim for the provincial flow-through share tax credit to Area II of Form T1229. d) Calculate Box A by adding Box (1) to Box (2) and subtracting Box (3). e) If the amount in Box A of Form T1229 is negative, report this amount as other income on line 130, of your 2012 tax return. f) For CEE, calculate Box (4) by multiplying Box A by 100%. For CDE, calculate Box (4) by multiplying Box A by 30%. g) Report your desired CEE and CDE claim for the current year in Box B, Area II of Form T1229. a. Note: You may claim any amount of CEE and CDE deduction up to a maximum of Box (4). h) Calculate Box [A-B] by subtracting Box B from Box A. Box [A-B] will be the amount carried forward to the 2013 taxation year. a. Note: Any unused balance of the CEE and CDE pool at the end of the year can be carried forward indefinitely. i) Report Area II, Box B to Area III. The total amount in Area III should be reported on line 224 of your 2012 tax return. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

16 SECTION V FEDERAL CLAIMS T5013 s (Cont d) PART B Claims (Cont d) 2. Claiming the Federal Investment Tax Credit Expenses Qualifying For Investment Tax Credit (ITC) Box 128 This amount represents the renounced Canadian exploration expenses that qualify for the Investment Tax Credit in This amount should be reported on Form T1229 Statement of Exploration and Development Expenses and T2038 Investment Tax Credit (Individuals) for calculating the investment tax credit available in 2012 to reduce your federal tax payable for the year, for a previous year, or for a future year. a) Report the amount from Box 128 on the T5013 slip to Area I and IV of Form T1229. b) Report the provincial flow-through share tax credit available in the year to Area IV of Form T1229. c) Calculate the eligible expenditure qualifying for an investment tax credit in Area IV of Form T1229 and enter the amount on line 6717, Part A of Form T2038. d) Calculate line B in Part A of Form T2038 by multiplying line 6717 by 15% and enter the amount in column 3 on page 2 of Form T2038. e) Report any carry forward balance of federal investment tax credits from the prior year on column 1, page 2 of your 2010 Form T2038. f) Calculate column 5 by adding column 1, 2 and 3 and subtracting column 4. g) Report the amount from column 5 on line C of Form T2038. h) Calculate line D by subtracting any Federal political contribution tax credits and labour-sponsored funds tax credits from Federal Tax. i) Report lesser of line C or line D on column 6. The amount in column 6 should be reported on line 412 of Schedule 1 Federal tax. If you are subject to alternative minimum tax, enter zero in column 6 and proceed to Calculating an allowable claim if alternative minimum tax (AMT applies). j) Calculate column 9 by subtracting column 6, 7, and 8 from column 5. The amount will be carried forward to your 2012 tax return. a. Note: Any unused balance at the end of the year can be carried back 3 years or carried forward 10 years. k) Report line 19 of Schedule 1 on line 420, page 4 of your 2012 income tax return. SECTION VI PROVINCIAL CLAIMS T5013 s ONTARIO RESIDENTS 1. Claiming the Ontario Share Tax Credit Expenses Qualifying For Ontario Tax Credit Box 145 This amount represents the renounced Canadian exploration expenses that qualify for the Ontario Focused Share Tax Credit for This amount should be reported on Form T1221 Ontario Focused Share Resource Expenses for 2012 and Subsequent Years (Individuals) for calculating the total qualifying resource expenses available in a) Report the amount from Box 145 on the T5013 slip to line 1, 2 or 3 of Form T1221. b) Report the amount from line 4 of T1221 to line 6266 in the Ontario focused flow-through share tax credit section of Form ON479 Ontario Credits. c) Calculate line 21 on Form ON479 by multiplying line 6266 by 5%. d) Report the amount from line 26 of ON479 on line 479 of your 2012 income tax return. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

17 SECTION VI PROVINCIAL CLAIMS T5013 s (Cont d) BRITISH COLUMBIA RESIDENTS 2. Claiming the British Columbia Mining Share Tax Credit Expenses Qualifying For British Columbia Tax Credit Box 141 This amount represents the renounced Canadian exploration expenses that qualify for the BC Mining Share Tax Credit for This amount should be reported on Form T1231 British Columbia Mining Share Tax Credit for calculating the BC investment tax credit available in a) Report the amount from Box 141 on the T5013 slip on line 1, Part 1 of Form T1231. b) Calculate line 3 of Form T1231 by multiplying line 1 by 20%. c) Complete Part 2, BC MFTS tax credit claim for 2012 and report your BC MFTS tax credit claim on line 9 of Form T1231. d) Complete Part 3, Carry back and amounts available for carry forward to future years if you have any unused credit at the end of the year. e) Report the amount from line 9 of Form T1231 on line 71 of Form BC428 British Columbia Tax. f) Report the amount from line 72 of Form BC428 on line 428, of your 2010 income tax return. MANITOBA FILERS 3. Claiming the Manitoba Mineral Exploration Tax Credit Expenses Qualifying For Manitoba Tax Credit Box 144 This amount represents the renounced Canadian exploration expenses that qualify for the Manitoba Mineral Exploration Tax Credit for This amount should be reported on Form T1241 Manitoba Mineral Exploration Tax Credit for calculating the Manitoba mineral exploration tax credit available in a) Report the amount from Box 144 of the T5013 slip on line 2, Part 1 of Form T1241. b) Calculate line 3 of Form T1241 by multiplying line 2 by 10%. c) Complete Part I, Manitoba mineral exploration tax credit claim for 2012 and report your Manitoba mineral exploration tax credit claim for the current year on line 8 of Form T1241. d) Complete Part 2, Carry back and amounts available to carry forward to future years if you have any unused credit at the end of the year. e) Report the amount from line 8 of Form T1241 on line 72 of Form MB428 Manitoba Tax. f) Report the amount from line 73 of Form MB428 on line 428, of your 2012 income tax return. SASKATCHEWAN FILERS 4. Claiming the Saskatchewan Mineral Exploration Tax Credit Expenses Qualifying For Saskatchewan Tax Credit Box 143 This amount represents the renounced Canadian exploration expenses that qualify for the Saskatchewan Mineral Exploration Tax Credit for You may receive Form SK-METC Saskatchewan Mineral Exploration Tax Credit, which indicates the amount of Saskatchewan Mineral Exploration Tax Credit available for g) If Form SK-METC is received, report the amount of tax credit from that form on line 72 of Form SK428 Saskatchewan Income Tax and Credits. h) Report the amount from line 70 of Form SK428 on line 428, of your 2012 income tax return. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

18 SECTION VII FILING INSTRUCTIONS FORM RELEVÉ -15 (RL-15) QUÉBEC RESIDENTS Net Canadian & Foreign Business Income (or Loss) Box 1 This amount represents your share of partnership income (loss) for the 2012 fiscal period March This amount should be reported on line 29, Net business income of Schedule L. The total net business income on line 34 of Schedule L should be reported on line 164, page 2 of your 2011 Québec Income Tax Return. Actual Amount of Eligible Dividends & Actual Amount of Ordinary Dividends Box 6A, 6B This amount represents your share of the partnership s actual dividends received from Canadian Corporations for the 2012 fiscal period ended March Box 6A represents the amount of eligible dividends. Box 6B represents the amount of ordinary dividends. a) Calculate the taxable amount of eligible dividends by multiplying Box 6A of the RL-15 slip by Calculate the taxable amount of ordinary dividends by multiplying Box 6B of the RL-15 slip by The sum of both amounts of taxable dividend should be reported on line 128, page 2 of your 2011 Québec Income Tax Return. b) Add the amounts in both Box 6A and Box 6B of the RL-15 slip and report the actual amount of dividends received on line 167, page 2 of your 2012 Québec Income Tax Return. c) Calculate the dividend tax credit by adding the following amounts: a) the amount included in line 128 for eligible dividends received after March 23, 2012, multiplied by 11.9%, b) the amount included in line 128 for ordinary dividends received before March 24, 2012 multiplied by 10.83% and c) the amount included in line 128 for ordinary dividends received after March 23, 2012 multiplied by 8%. The dividend tax credit should be reported on line 415, page 4 of your 2011 Québec Income Tax Return. Interest From Canadian Sources Box 7 This amount represents your share of partnership interest income for the 2012 fiscal period ended March This amount should be reported on line 130, page 2 of your 2012 Québec Income Tax Return. Capital Gains (or Capital Losses) Box 10 or 12 This amount represents your share of partnership capital gains (losses) for the 2012 fiscal period ended March This amount should be reported on line 56 of Schedule G. The total taxable capital gain from line 98 of Schedule G should be reported on line 139, page 2 of your 2012 Québec Income Tax Return. Note: You are strongly advised to consult with your tax advisor to determine your eligibility for exemption on gains realized from the disposition of resource property. Gross Income (or Gross Loss) of the Partnership Box 14 This amount represents the total 2012 gross income or loss of the partnership. Partners are not required to report this amount in the 2012 Québec Income Tax Return. Carrying Charges Box 15 This amount represents your share of partnership carrying charges related to borrowings of the partnership. This amount should be reported on line 231 of your 2012 Québec income tax return. The amount of any deductible interest expense you incurred in the year on a borrowing to finance your limited partnership units should be treated in the same way. At-Risk Amount Box 26 This amount represents a partner s original cost of partnership interest plus or minus certain adjustments. A limited partner cannot deduct partnership losses and resource expenses of the at-risk amount. This amount is for reference only and is not reported in the 2012 Québec Income Tax Return. Limited Partnership Loss Box 27 This amount represents your share of the current year limited partnership loss that cannot be deducted. Note: You can only deduct this amount from future partnership income allocations if you have a positive at-risk amount. You can carry forward this amount indefinitely. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

19 SECTION VII FILING INSTRUCTIONS FORM RELEVÉ -15 (RL-15) (Cont d) QUÉBEC RESIDENTS (Cont d) Total Cost of Units Box 52 This amount represents a partner s original cost of partnership interest. This amount is for reference only and is not reported in your 2012 Québec income tax return. 1. Claiming Canadian Exploration Expenses & Canadian Development Expenses Canadian Exploration Expenses BOX 60 This amount represents your share of Canadian exploration expenses of This amount should be added to the Canadian Exploration Expenses pool to determine the maximum available resource deduction. This deduction is claimed at line 241 of your 2012 Québec income tax return. Canadian Development Expenses BOX 61 This amount represents your share of Canadian development expenses for This amount is to be added to your cumulative Canadian development expenses, after the corresponding Amount of Assistance (box 66[61]) is subtracted. You can claim a deduction on line 241 of the income tax return. You can deduct either 100% of your cumulative exploration expenses at the end of the year, or 30% of your cumulative development expenses, as applicable. Québec Exploration Expenses BOX 60-1 This amount represents the Québec exploration expenses that do not qualify for the additional 25% deduction (box 60) Renewable and Conservation Expenses BOX 60-2 This amount represents Renewable and conservation expenses incurred in Québec (box 60) Québec Development Expenses BOX 61-1 This amount represents the Québec development expenses (box 61). Boxes 60 and 61 may contain expenses which are not to be included in the calculation of the adjustment of investment expenses (see boxes 60-1, 60-2 and 61-1). Do not enter the deduction claimed for these expenses on Schedule N [Adjustment of investment expenses]. Québec Exploration Expenses BOX 62 This amount represents the Québec exploration expenses for individuals only and is included in your Canadian exploration expenses (box 60) and entitles you to an additional deduction. On line 250 of the return, you can deduct up to 100% of the amount in box 62, after subtracting the corresponding amount of assistance (box 66[62]). FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

20 SECTION VII FILING INSTRUCTIONS FORM RELEVÉ -15 (RL-15) (Cont d) 1. Claiming Canadian Exploration Expenses & Canadian Development Expenses (Cont d) Québec Surface Mining and Oil and Gas Exploration Expenses BOX 63 A portion of the Québec exploration expenses & Québec surface mining and oil and gas exploration expenses amounts (25% of the amount in box 62 and 25% of the amount in box 63) is to be added to your exploration base relating to Québec exploration expenses or your exploration base relating to surface mining or oil and gas exploration expenses, after the corresponding amounts of assistance (box 66[62] or box 66[63], as applicable) are subtracted. At the end of the year, you can deduct up to 100% of the amount of the exploration bases on line 287 of the income tax return. Exploration Expenses Northern Quebec BOX 64 This amount represents the Exploration expenses incurred in northern Québec. Only corporations are entitled to an additional deduction for such expenses. Security Issue Expenses BOX 65 You can deduct this amount on line 297 of the income tax return. Amounts of Assistance BOX 66 The Amounts of assistance corresponding to the expenses reported in boxes 60 through 64 (Box 66[60], box 66[61], Box 66[62],Box 66[63], Box 66[64]) You are advised to obtain professional tax advice on your individual circumstances. FRONT STREET CAPITAL Tax Guide 2012 Tax Year Rev Apr

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