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.

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

James, I recommend finding an accountant who specializes in real estate taxation.

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

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

If your IRAs had any non-deductible contributions, Roth conversion (and your IRA taxation in general) becomes much more complicated.