Qualified Dividend Clarification

In 2003, Congress enacted new lower tax rates for certain dividends. As previously reported, your 2003 Form 1099-DIV will show an amount in Box 1a - Ordinary Dividends. It will also show an amount in Box 1b - Qualified Dividends. The amount in Box 1a is the total of taxable distributions CIRI paid to you in 2003. Box 1b will show the same amount qualified for the reduced tax rates. If you have held your shares less than one year or inherited new shares during 2003, please consult your tax advisor for the appropriate treatment of dividends on your tax return, or for how much of your CIRI dividend, if any, qualifies for the lower tax rate.

Elders' Payments
We previously reported that distributions from both the Elders’ Benefit Program and the new irrevocable Elders’ Settlement Trust would be reported in Box 1a - Ordinary Dividends, on your CIRI Form 1099-DIV. This remains true for all distributions from the Elders’ Benefit Program; however, the Nov. 14, 2003, distribution made from the irrevocable Elders’ Settlement Trust had both a taxable and non-taxable portion. What does this mean to you? Any amounts you received from the Elders’ Benefit Program will be reported by CIRI on a Form 1099-DIV, both in Box 1a - Ordinary Dividends, and in Box 1b, Qualified Dividends. However, if you received the Nov. 14, 2003, payment from CIRI’s Irrevocable Elders’ Settlement Trust, $405.55 of that $450 payment will be reported on a Form 1099-DIV in Boxes 1a and 1b, while the remaining $44.45 will be reported in Box 3, Nontaxable Distributions.