Lauren, I recommend finding an accountant that specializes in real estate taxation over one that is local.

Account ClosedA clarification is in order.All tax exempt entities are exposed to certain taxation in certain circumstances; when they engage in a trade or business on a regular basis, or when they utilize debt-financing.The taxable income generated from those activities are UBTI (unrelated business taxable income) and UDFI (Unrelated Debt-Financed Income), respectively.The tax paid is UBIT (Unrelated Business Income Tax)A qualified employer plan such as a 401(k) is generally subject to tax on debt-financed income. 

I am not talking about hiding out here I am talking about taxation.  

I am looking for an accountant familiar with the rules for Vermont taxation for my short term rental property.

C-corporations have double taxation (tax on income at the corporate level, and tax on dividends when earnings and profits are distributed to the shareholder/member), while S-corporations are flow-through (so no double tax).

I read up on it and don't really see it being much of an issue for us personally, it is still a pass through taxation and we would need to do minutes.  

I came across this free tax guide concerning rentals from E&Y. It's published online, it is free, and it is an informative read: https://assets.airbnb.com/eygu...Enjoy!

(Line 26 flows to Sched E, page 2, line 41.)But still, how can all the $86k be shielded from taxation?

Jacob, I recommend finding an accountant that specializes in real estate taxation and tax planning.

If there is a treaty for the avoidance of double taxation between your country and the foreign country, you can claim the taxes paid overseas against your domestic taxes and you will only pay the difference between the two tax rates if your domestic taxes are higher.You could decide to not pay your overseas taxes but, if you do that good luck if they catch you and you have to go to a foreign court to defend yourself.