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3. If I only hold the CEP units for a few months, and no MLP distribution income is generated, does this become strictly a Schedule D entry i.e. Capital Gain/Loss item?

ira replied "There will be income. It's a partnership which means you're taxed on your share of the income regardless of whether you get a cash distribution or not."

But the op said no MLP distribution income is generated

4. If I do have to file Non-Resident(NR) tax forms for other states, is there a states equivalent item to Foreign Tax Credit?

ira said "Check the CA tax code. Each state will tax you on the income allocated to that state. CA will tax you on everything."

Most states will give you a credit (at their rate or the taxing state's rate, whichever is lower) for the taxes paid to another State so that you aren't taxed twice on the same income. Look at the CA tax return for a mention of a credit for taxes paid to another State.

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