In addition, at-large shareholders received a form 1099-MISC reporting all 2000 7(j) payments as well as elders" distributions and any prize or award payments. While CIRI cannot provide tax advice, we suggest consulting with your own tax advisor regarding your particular circumstances and any federal and/or state income tax consequences of the distributions.

We are providing the following general explanations of the federal tax treatment of our distributions for you and your tax preparer. The federal tax treatment of the 2000 CIRI distributions may vary depending upon whether you received your CIRI shares as an original enrollee of CIRI, whether you inherited your shares or whether you received your shares as a gift. If your CIRI shares are any combination of the above, then the tax treatment may vary.

As a technical matter, CIRI believes that all of the distributions paid by CIRI in 2000 should be treated as a return of capital rather than as a dividend taxable as ordinary income. CIRI"s conclusion is based upon its belief that it had no accumulated or current earnings and profits for tax purposes for calendar year 2000. As a result, none of the distributions paid in 2000 should constitute taxable dividends for federal income tax purposes. Instead, the distributions should constitute a return to capital that is tax-free to the extent of your "basis" in your CIRI shares and taxable as capital gain to the extent in excess of your basis. The basis of your CIRI shares may vary depending on how you came to own your shares.

If you only hold CIRI shares that you received directly from CIRI as an original CIRI enrollee, and/or that you received as a gift from someone who received the shares directly from CIRI as an original CIRI enrollee, then you should not owe any federal income tax with respect to the distributions paid by CIRI in 2000, nor have any reporting requirements.

If you inherited any of your CIRI shares, and/or if you received any of your CIRI shares as a gift from someone who did not receive the shares directly from CIRI as an original CIRI enrollee, then some or all of CIRI"s 2000 distributions may constitute capital gain income for federal income tax purposes.

The amount of gain depends upon your tax "basis" in your shares. The distributions are taxable as a capital gain to the extent they are in excess of your basis in your shares. Your tax basis in shares you inherited is equal to the fair market value of those shares on the date of death of the person from whom you inherited the shares, less the amount of any subsequent "return of capital" distributions paid by CIRI.

Your tax basis in shares you received as a gift is equal to the basis of the person who gave you those shares, less the amount of any subsequent return of capital distributions paid by CIRI.

Shareholders received a more detailed tax information packet from CIRI in the mail. Review the tax information packet and consult with your tax advisor for more information. The packet includes a chart which sets forth by year the return of capital distributions previously paid by CIRI. Your tax advisor can help you with questions regarding your own particular circumstances and regarding any federal and/or state income tax consequences of the distributions for you.

CIRI would like to thank all the shareholders that took the time to share their comments with us regarding the special distribution they received in late December. The following is a sampling of shareholder response:

"Your dividend was an answer to a prayer. Thank you so very much, I can't tell you what it has meant to me."
-Marie Anderson

"I would like to thank Carl Marrs, his advisors and the CIRI Board of Directors for the incredible dividend that they just approved for all shareholders."
-Leslie Barnett

"Thank you so much for all you have done for our people over the years. Your gracious gift to us this Christmas was very much appreciated."
-George Bratcher

"This dividend will change the lives of many CIRI shareholders because it will make it possible for more of us to fulfill our educational and financial goals."
-Carmen Bydelek

"It's a true miracle for me and my family because of the timing of the distribution. Now I can pay off my debt, fix my house, get a car and invest the rest."
-Maria Coleman

Health Care and Public Assistance

Q: How is the special distribution going to affect my Social Security disability or regular Social Security benefits?
A: If you are receiving Social Security disability benefits or regular Social Security, your benefits will not change. If you have any questions regarding your Social Security benefits, contact the Social Security office at their nationwide toll-free number 1-800-772-1213. Please be aware there may be impacts to supplemental security income (SSI) and individuals are encouraged to contact their case workers.

Q: Will my Medicare end from Social Security?
A: Your Medicare benefits will not change.

Q: How will the special distribution affect benefits for a family member staying at a nursing home or assisted living facility?
A: If your family member is residing in a nursing home or assisted living facility, the facility and your caseworker at the Alaska Division of Public Assistance will have the information about income guidelines. If you need assistance, call Emily Johnston, Southcentral Foundationıs family health resource representative, at (907) 729-1392.

Q: Will a family member still be able to get assistance from a home health care attendant?
A: You should contact your family memberıs care coordinator or his/her social worker.

Q: When my Assistive Technology Access Partnership (ATAP)/family Medicaid ends, when can I reapply?
A: You will need to contact your caseworker right away because this may cause you to become over resourced, meaning your income limit might be too high to be eligible for public assistance. You can reapply after spending your resource limit.

Q: Will my childrenıs Denali Kidcare benefits end?
A: If your children have on-going Denali Kidcare benefits the month you received the dividend, the benefits will stay the same. The special distribution will count only in the month it was received. You can reapply the following month.

Q: How can I spend my money, so it doesnıt affect my benefits?
A: You will need to contact your caseworker at Division of Public Assistance if you are receiving Medicaid benefits. If you are receiving Social Security disability and Medicaid, you need to contact both Social Security and your caseworker at the Division of Public Assistance.

Housing

Q: How will the special distribution affect my low income housing benefits or the emergency voucher system I receive from Cook Inlet Tribal Council?
A: The special distribution does not affect the eligibility of the recipients.

Q: Will the special distribution affect Cook Inlet Housing Authorityıs Home II program or assistance with buying my first home?
A: The special distribution does not affect this program. The special distribution is considered one time, sporadic income and does not count against your eligibility for this program.

Q: If I use my entire distribution for purchase of a home, will I still be eligible for a loan from Cook Inlet Housing Authority?
A: Yes, you are still eligible, but remember Cook Inlet Housing Authority still must determine your household income for eligibility for its programs and you must be a first time home buyer. If you have additional questions, contact the Home II program by calling (907) 276-8822.

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