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I am thinking of buying Master Limited Partnership (MLP) units, and I am trying to understand the tax consequences. So here are my questions. Let me mention the name of the MLP so it properly frames the questions. It is Constellation Energy Partners LLC (Ticker symbol:CEP), owning natural resource assets in Alabama, Kansas and Oklahoma. CEP is based in Baltimore, Maryland.

1. Besides Federal and California (home state) tax forms, how many other states would I file/potentially file taxes?

2. CEP is a subsidiary of Constellation Energy Commodities Group, Inc(CCG). CCG is the wholesale energy operations Division of another entity, Constellation Energy (Ticker symbol:CEG), a utility with operations in several states.
http://www.constellation.com/vcmfiles/Constellation/Files/Assets12.06.pdf

If CCG and/or CEG have revenue generating assets in other states, does this change the tax filing scenario for a CEP unit-holder?

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?

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?


Thanks in advance,
Hohum
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