What tax considerations should investors be aware of for this quarterly distribution?

Tax considerations for the $0.020 per‑unit quarterly distribution

1. Dividend classification – The trust’s payout is a cash distribution, not a return of capital. For U.S. investors it will be treated as ordinary dividend income and therefore taxed at the investor’s ordinary marginal rate (up to 37 % in 2025). Because the amount is modest, the distribution will not trigger the “qualified‑dividend” rate (20 % long‑term‑capital‑gains tax) unless the trust explicitly designates the payment as a qualified dividend, which the release does not.

2. Form 1099‑DIV reporting – The distribution date (recorded 25 Aug 2025, paid on or before 29 Aug 2025) means the amount will appear on the 2025 Form 1099‑DIV, which is issued to investors by the end of February 2026. Investors should retain the statement for their tax return and ensure the dividend is included on Schedule B (or Schedule 1 if the distribution is non‑qualified).

3. State and foreign‑tax implications – The dividend is subject to state income tax in the investor’s residence state (most states tax ordinary dividends at the same rate as federal). Non‑U.S. persons will be subject to any applicable withholding under the IRS’s “portfolio‑interest” rules; a 30 % withholding may apply unless a treaty reduces the rate.

4. Potential impact on cost‑basis – Because the distribution is not a return of capital, it does not adjust the unit’s cost‑basis. However, if an investor sells units shortly after the payout, the dividend will be taxed separately from any capital‑gain on the sale, so the net after‑tax return may be lower than the headline yield.

Trading implications – The modest $0.020/unit payout will likely cause a small, predictable price dip on the ex‑distribution date (≈$0.02‑$0.03). Traders who are tax‑sensitive may prefer to hold through the record date to capture the dividend, then sell after the ex‑date to avoid a double‑taxed short‑term gain. Conversely, investors focused on tax‑efficiency could wait until the dividend is paid, then re‑enter the position, recognizing that the distribution does not affect the underlying asset value. In short, the distribution is taxable ordinary income, so investors should factor the after‑tax yield into their total‑return calculations and plan entry/exit around the ex‑date to optimize tax outcomes.