I recommend finding an accountant who specializes in real estate taxation, tax planning and financial planning. 

Let's break down the pros and cons of each approach:Forming an LLC in the State Where the Property is Located:Pros:Compliance with Local Laws: Establishing an LLC in the state where the property is situated ensures compliance with local regulations and laws specific to that jurisdiction.Legal Clarity: It provides clear legal jurisdiction and may simplify any legal proceedings related to the property in that state.Perception: Operating with a local LLC may give tenants and local authorities confidence in your commitment to the community.Cons:Additional Costs: Setting up and maintaining an LLC in another state means incurring additional registration fees, taxes, and possibly hiring local legal counsel.Administrative Burden: Managing multiple LLCs across different states adds complexity to your administrative workload, including extra paperwork and compliance requirements.Tax Implications: You may face tax obligations in both the state where the property is located and your home state, potentially leading to double taxation or complexities in tax filings.Managing Through Home State LLC:Pros:Simplified Management: Handling all properties under a single LLC streamlines administrative tasks, reducing paperwork and simplifying tax filings.Cost Savings: Avoiding the need to establish multiple LLCs in different states saves on registration fees, legal expenses, and ongoing maintenance costs.Consistency: Uniformity in management practices and legal structures may contribute to efficiency and ease of operation across your real estate portfolio.Cons:Legal Exposure: Operating out-of-state properties under a home state LLC may expose your personal assets to the laws and liabilities of the other state, potentially diminishing the liability protection the LLC offers.Compliance Challenges: You'll need to ensure your home state LLC meets the legal requirements for conducting business in other states, which could involve additional filings and fees.Perception and Credibility: Some tenants or local stakeholders may prefer dealing with a landlord who has a local presence, which could impact your reputation or relationships in the community.Ultimately, the decision depends on your specific circumstances, risk tolerance, and long-term goals.

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

You will pay tax at some point in the future.  

The best advice is consulting a cross border tax specialist who also have a good understanding of US real estate laws and taxation.  

This means rental income, dividends, and capital gains from U.S. investments must be reported on your Canadian tax return.Foreign Tax Credit: The good news is that Canada has a tax treaty with the U.S. to prevent double taxation.

They apply, but you are just subject to gift tax at that point, which does not actually result in a tax bill for you, but a reduction in your total giftable allowance which is ~13M dollars. 

@David ChanceI recommend finding an accountant who specializes in real estate taxation, tax planning and financial planning.

Side note: possibly labeling is what caused the disconnect in your situation, to begin with.Specifically in your case, your re-negotiating of the option credit does not trigger an immediate taxation.

@Deirdre Lizio thanks for the tips on foreign taxation, however that should not be an issue for us as we are not actually planning to stay in one place but rather be digital nomads.