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Feb 17, 2017 04:00 PM Pricing delayed 20 minutes

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Annual 1099-DIV

2016 Common and Preferred Stock Tax Information

Updated as of January 20, 2017.

CorEnergy provides the following tax information to its common and preferred stockholders pertaining to the character of distributions paid during 2016.

For a common stockholder that received all distributions in cash during 2016, 39.4 percent will be treated as ordinary dividend income (Box 1a) and 61.6 percent will be treated as return of capital (Box 3). Of the ordinary dividends, zero percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Common Shareholders

Record
Date
Payable Date Total Distributions Per Share Total Ordinary Dividends
Box 1a
Qualified Dividends
Box 1b
Total Capital Gain Distr.
Box 2a
Unrecap. Sec. 1250 Gain
Box 2b
Nondividend Distr.
Box 3
2/12/2016 2/29/2016 $0.7500 $0.2955 $0.0000 $0.0000 $0.0000 $0.4545
5/13/2016 5/31/2016 0.7500 0.2955 0.0000 0.0000 0.0000 0.4545
8/17/2016 8/31/2016 0.7500 0.2955 0.0000 0.0000 0.0000 0.4545
11/15/2016 11/30/2016 0.7500 0.2955 0.0000 0.0000 0.0000 0.4545
Total 2016 Distributions: $3.0000 $1.1820 $0.0000 $0.0000 $0.0000 $1.8180

For a preferred stockholder that received all distributions in cash during 2016, 100 percent will be treated as ordinary dividend income (Box 1a) and zero percent will be treated as return of capital (Box 3). Of the ordinary dividends, zero percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

7.375% Series A Cumulative Redeemable Preferred Stock

Record
Date
Payable Date Total Distributions Per Share Total Ordinary Dividends
Box 1a
Qualified Dividends
Box 1b
Total Capital Gain Distr.
Box 2a
Unrecap. Sec. 1250 Gain
Box 2b
Nondividend Distr.
Box 3
2/12/2016 2/29/2016 $0.4609 $0.4609 $0.0000 $0.0000 $0.0000 $0.0000
5/13/2016 5/31/2016 0.4609 0.4609 0.0000 0.0000 0.0000 0.0000
8/17/2016 8/31/2016 0.4609 0.4609 0.0000 0.0000 0.0000 0.0000
11/15/2016 11/30/2016 0.4609 0.4609 0.0000 0.0000 0.0000 0.0000
Total 2016 Distributions: $1.8436 $1.8436 $0.0000 $0.0000 $0.0000 $0.0000
Box 3:

Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

CorEnergy elected effective for its 2013 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for 2014 and subsequent taxable years.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

A REIT is generally required to distribute during the taxable year an amount equal to at least 90 percent of the REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as either "ordinary dividend income" or "qualified dividend income" for federal income tax purposes. Qualified dividend income is eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 20%. Dividend income (other than qualified dividend income) is treated as ordinary income, subject to a maximum income tax rate of 39.6%.

For taxable years beginning after December 31, 2012, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest (including interest on our debt securities), dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

2016 Form 8937

Annual 1099-DIV

2015 Common and Preferred Stock Tax Information

Updated as of January 19, 2016.

CorEnergy provides the following tax information to its common and preferred stockholders pertaining to the character of distributions paid during 2015.

For a common stockholder that received all distributions in cash during 2015, 72 percent will be treated as ordinary dividend income (Box 1a) and 28 percent will be treated as return of capital (Box 3). Of the ordinary dividends, 2.69 percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Common Stock

Record Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box
1a
Qualified Dividends Box 1b Total Capital Gain Distributions Box
2a
Nondividend Distributions Box 3
2/13/2015 2/27/2015 $0.6500 $0.4680 $0.0126 $0.0000 $0.1820
5/15/2015 5/29/2015 0.6750 0.4860 0.0131 0.0000 0.1890
8/17/2015 8/31/2015 0.6750 0.4860 0.0131 0.0000 0.1890
11/13/2015 11/30/2015 0.7500 0.5400 0.0146 0.0000 0.2100
Total 2015 Distributions: $2.7500 $1.9800 $0.0534 - $0.7700

For a preferred stockholder that received all distributions in cash during 2015, 100 percent will be treated as ordinary dividend income (Box 1a) and 0 percent will be treated as return of capital (Box 3). Of the ordinary dividends, 2.69 percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

7.375% Series A Cumulative Redeemable Preferred Stock

Record Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box
1a
Qualified Dividends Box 1b Total Capital Gain Distributions Box
2a
Nondividend Distributions Box 3
5/15/2015 6/1/2015 $0.6351 $0.6351 $0.0171 - -
8/17/2015 8/31/2015 0.4609 0.4609 0.0124 - -
11/13/2015 11/30/2015 0.4609 0.4609 0.0124 - -
Total 2015 Distributions: $1.5569 $1.5569 $0.0419 - -

Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

CorEnergy elected effective for its 2013 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for 2014 and subsequent taxable years.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

A REIT is generally required to distribute during the taxable year an amount equal to at least 90 percent of the REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as either "ordinary dividend income" or "qualified dividend income" for federal income tax purposes. Qualified dividend income is eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 20%. Dividend income (other than qualified dividend income) is treated as ordinary income, subject to a maximum income tax rate of 39.6%.

For taxable years beginning after December 31, 2012, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest (including interest on our debt securities), dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

2015 Form 8937

2015 Reverse Stock Split Form 8937

Annual 1099-DIV

Updated as of January 30, 2015.

CorEnergy provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2014. For a stockholder that received all distributions in cash during 2014, 74 percent will be treated as ordinary dividend income (Box 1a) and 26 percent will be treated as return of capital (Box 3). Of the ordinary dividends, 48% will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box
1a
Qualified Dividends Box 1b Total Capital Gain Distributions Box
2a
Nondividend Distributions Box 3
1/13/2014 1/23/2014 $0.1250 0.0928 0.0450 0.0000 0.0322
5/14/2014 5/22/2014 0.1290 0.0958 0.0464 0.0000 0.0332
8/15/2014 8/29/2014 0.1300 0.0965 0.0467 0.0000 0.0335
11/14/2014 11/28/2014 0.1300 0.0965 0.0467 0.0000 0.0335
Total 2014 Distributions: $0.5140 $0.3816 $0.1848 $0.0000 $0.1324
Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.
Box 1a: Total Ordinary Dividends.
Box 1b: Qualified dividends are taxed at the reduced capital gain tax rates of 15% or 5% if the stockholder meets the holding period requirements.
Box 3: Nondividend distributions are nontaxable and considered return of capital.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

CorEnergy elected effective for its 2013 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for 2014 and subsequent taxable years.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

A REIT is generally required to distribute during the taxable year an amount equal to at least 90 percent of the REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as either "ordinary dividend income" or "qualified dividend income" for federal income tax purposes. Qualified dividend income is eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 20%. Dividend income (other than qualified dividend income) is treated as ordinary income, subject to a maximum income tax rate of 39.6%.

For taxable years beginning after December 31, 2012, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest (including interest on our debt securities), dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

2014 Form 8937

2015 Reverse Stock Split Form 8937

Annual 1099-DIV

2013 Common Stock Tax Information

CorEnergy provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2013. For a stockholder that received all distributions in cash during 2013, 43 percent will be treated as qualified dividend income (Box 1b) and 57 percent will be treated as return of capital (Box 3). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box
1a
Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
3/8/2013 3/6/2013 3/19/2013 $0.1250 $0.1250 $0.1250 $0.0000 $0.0000
6/28/2013 6/26/2013 7/5/2013 0.1250 0.0367 0.0367 0.0000 0.0883
9/30/2013 9/26/2013 10/4/2013 0.1250 0.0000 0.0000 0.0000 0.125
Total 2013 Distributions: $ 0.3750 $ 0.1617 $ 0.1617 $0.00 $ 0.2133
Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments.

CorEnergy historically has been treated as a C corporation. With the withdrawal of its election to be treated as a business development company, CorEnergy has been focused on making real property asset investments in the U.S. energy infrastructure sector.

In 2013 we qualified, and in January 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for subsequent taxable years.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

A REIT is generally required to distribute during the taxable year an amount equal to at least 90 percent of the REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as either "ordinary dividend income" or "qualified dividend income" for federal income tax purposes. Qualified dividend income is eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 20%. Dividend income (other than qualified dividend income) is treated as ordinary income, subject to a maximum income tax rate of 39.6%.

For taxable years beginning after December 31, 2012, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest (including interest on our debt securities), dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

2013 Form 8937

Annual 1099-DIV

2012 Common Stock Tax Information

CorEnergy provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2012. For a stockholder that received all distributions in cash during 2012, 100 percent will be treated as return of capital (Box 3). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box 1a Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
11/23/12 11/20/12 11/30/12 $0.1100 $0.00 $0.00 $0.00 $0.1100
8/24/12 8/22/12 9/4/12 0.1100 0.00 0.00 0.00 0.1100
5/23/12 5/21/12 6/1/12 0.1100 0.00 0.00 0.00 0.1100
2/22/12 2/17/12 3/1/12 0.1100 0.00 0.00 0.00 0.1100
Total 2012 Distributions: $ 0.4400 $0.00 $0.00 $0.00 $ 0.4400
Box 3: Nondividend distributions are nontaxable and considered return of capital.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its cash available for distribution (generally, Adjusted Funds from Operations less required principal payments on debt, needed expenditures for capital replacements, and other payment obligations).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2014.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

2012 Form 8937

Annual 1099-DIV

2011 Common Stock Tax Information

CorEnergy provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2011. For a stockholder that received all distributions in cash during 2011, 100 percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends
Box 1a
Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
11/22/11 11/18/11 11/30/11 $0.1100 $0.1100 $0.1100 $0.00 $0.00
8/24/11 8/22/11 9/1/11 0.1000 0.1000 0.1000 0.00 0.00
5/24/11 5/20/11 6/1/11 0.1000 0.1000 0.1000 0.00 0.00
2/18/11 2/16/11 3/1/11 0.1000 0.1000 0.1000 0.00 0.00
Total 2011 Distributions: $ 0.4100 $ 0.4100 $ 0.4100 $0.00 $0.00
Box 1b: Qualified dividends are taxed at the reduced capital gain tax rates if the stockholder meets the holding period requirements.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its distributable cash flow (generally, cash from operations less certain operating expenses and reserves).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2013.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

Annual 1099-DIV

CorEnergy provides the following tax information to its common stockholders pertaining to its character of distributions during 2010. For a stockholder that received all distributions in cash during 2010, 100 percent will be treated as a return of capital (Box 3).The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends
Box 1a
Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
11/22/10 11/18/10 11/30/10 $0.10 $0.00 $0.00 $0.00 $0.10
8/23/10 8/19/10 9/1/10 0.10 0.00 0.00 0.00 0.10
5/21/10 5/19/10 6/1/10 0.10 0.00 0.00 0.00 0.10
2/19/10 2/17/10 3/1/10 0.13 0.00 0.00 0.00 0.13
Total 2010 Distributions: $ 0.4300 $0.00 $0.00 $0.00 $ 0.4300
Box 1a: Total Ordinary Dividends.
Box 1b: Qualified dividends are taxed at the reduced capital gain tax rates of 15% or 5% if the stockholder meets the holding period requirements.
Box 3: Nondividend distributions are nontaxable and considered return of capital.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its distributable cash flow (generally, cash from operations less certain operating expenses and reserves).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2013.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

Annual 1099-DIV

CorEnergy provides the following tax information to its common stockholders pertaining to its character of distributions during 2009. For a stockholder that received all distributions in cash during 2009, 100 percent will be treated as a return of capital (Box 3).The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box 1a Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
11/23/09 11/19/09 11/30/09 $0.13 $0.00 $0.00 $0.00 $0.13
8/20/09 8/18/09 9/1/09 0.13 0.00 0.00 0.00 0.13
5/22/09 5/20/09 6/1/09 0.13 0.00 0.00 0.00 0.13
2/23/09 2/19/09 3/2/09 0.23 0.00 0.00 0.00 0.23
Total 2009 Distributions: $ 0.6200 $0.00 $0.00 $0.00 $ 0.6200
Box 1a: Total Ordinary Dividends.
Box 1b: Qualified dividends are taxed at the reduced capital gain tax rates of 15% or 5% if the stockholder meets the holding period requirements.
Box 3: Nondividend distributions are nontaxable and considered return of capital.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its distributable cash flow (generally, cash from operations less certain operating expenses and reserves).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2013.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

Annual 1099-DIV

CorEnergy provides the following tax information to its common stockholders pertaining to its character of distributions during 2008. For a stockholder that received all distributions in cash during 2008, $1.00882 will be treated as a return of capital (Box 3), with the remaining $0.03368 as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends
Box 1a
Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
11/20/08 11/18/08 11/28/08 $0.2650 $0.00856 $0.00856 $0.00 $0.25644
8/21/08 8/19/08 9/2/08 0.2650 0.00856 0.00856 0.00 0.25644
5/22/08 5/20/08 6/2/08 0.2625 0.00848 0.00848 0.00 0.25402
2/21/08 2/19/08 3/3/08 0.2500 0.00808 0.00808 0.00 0.24192
Total 2008 Distributions: $ 1.0425 $ 0.0337 $ 0.0337 $0.00 $ 1.0088
Box 1a: Total Ordinary Dividends.
Box 1b: Qualified dividends are taxed at the reduced capital gain tax rates of 15% or 5% if the stockholder meets the holding period requirements.
Box 3: Nondividend distributions are nontaxable and considered return of capital.

If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares acquired is the greater of the purchase price or the market close price on the payment date.

Nothing contained herein should be construed as tax advice, consult your tax advisor for more information. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its distributable cash flow (generally, cash from operations less certain operating expenses and reserves).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2013.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.

Annual 1099-DIV

CorEnergy provides the following tax information to its common stockholders pertaining to its character of distributions during 2007. For a stockholder that received all distributions in cash during 2007, $0.57 will be treated as a return of capital (Box 3). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.

Record Date Ex-Div Date Payable Date Total Distributions Per Share Total Ordinary Dividends Box 1a Qualified Dividends Box 1b Capital Gain Distributions Box 2a Nondividend Distributions Box 3
5/24/07 5/22/07 6/1/07 $0.160 $0.00 $0.00 $0.00 $0.160
8/23/07 8/21/07 9/4/07 0.180 0.00 0.00 0.00 0.180
11/23/07 11/20/07 11/30/07 0.230 0.00 0.00 0.00 0.230
Total 2007 Distributions: $ 0.5700 $0.00 $0.00 $0.00 $ 0.5700

Box 3: Nondividend distributions are nontaxable and considered return of capital.

Tax Features

Company Tax Features

As a corporation, CorEnergy allows both institutions and retirement accounts to join individual stockholders as investors. CorEnergy provides one Form 1099 per stockholder at the end of the year, instead of multiple K-1s and potential state tax filings for individual partnership investments. CorEnergy is obligated to pay federal and applicable state corporate taxes on its taxable income.

CorEnergy is designed to provide an efficient alternative to investing directly in partnerships and an attractive distribution, with a historically low correlation to returns on stocks and bonds.

Although partnerships may generate taxable income, CorEnergy expects the partnerships to pay cash distributions in excess of such taxable income. Similarly, CorEnergy expects to distribute cash in excess of its taxable income to stockholders and intends to distribute substantially all of its distributable cash flow (generally, cash from operations less certain operating expenses and reserves).

Stockholder Tax Features

CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.

Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.

Dividend income will be treated as "qualified dividend income" for federal income tax purposes, eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 15%, which is set to expire Dec. 31, 2012. CorEnergy expects that a significant portion of distributions to stockholders will constitute qualified dividend income.

There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.

Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.

REIT Tax Features

CorEnergy has announced the withdrawal of its election to be treated as a business development company and is focused on making real asset investments in the U..S. energy infrastructure sector. CorEnergy may in the future choose to be treated as a REIT for federal income tax purposes and to make an election to be treated as a REIT. If CorEnergy decides to make a REIT election, the potential election will not be effective prior to January 1, 2013.

REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

REITs are required to distribute dividends (other than capital gain dividends) to stockholders in an amount equal to at least 90% of "REIT taxable income." If it satisfies the minimum distribution requirement, the REIT generally is entitled to a deduction for dividends paid. The REIT stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.

Report of Organizational Actions Affecting Basis of Securities

Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions, that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.

CorEnergy had no organizational actions affecting the basis of securities to report during 2011.