I recommend finding an accountant specializing in real estate taxation.

If there's a treaty for the avoidance of double taxation between the two countries, you should hopefully be able to credit your Portuguese income taxes against your US ones.Hope this helps.

You do need to consider multi-state taxation and passive activity losses when doing this.

@Ray WhiteI recommend finding an accountant who specializes in real estate taxation and tax planning for high earners.

@Tasha RivardI recommend finding an accountant specializing in real estate taxation.

Converting your single-family home into a rental property involves several considerations to protect yourself and ensure smooth operations: Establish an LLC:Liability Protection: Holding the rental property in an LLC can protect your personal assets from potential lawsuits related to the property.Tax Benefits: An LLC can offer tax advantages, such as pass-through taxation, where rental income is taxed at your individual income tax rate.Insurance:Landlord Insurance: Ensures coverage for property damage, liability claims, and loss of rental income.Umbrella Policy: Provides additional liability coverage beyond your landlord insurance, offering extra protection.Deductions:Mortgage Interest and Property Taxes: Continue to deduct these expenses.Depreciation: Depreciate the cost of the property over 27.5 years, excluding the land value.Maintenance and Repairs: Deduct costs related to maintaining the property.Property Management Fees: Deduct fees paid to the property manager.Filing Taxes:Schedule E: Report rental income and expenses on Schedule E of your tax return.Separate Accounts: Maintain separate bank accounts for rental income and expenses to simplify bookkeeping.Lease Agreement:Solid Lease Terms: Ensure your lease agreement is thorough, covering rent amount, due date, late fees, maintenance responsibilities, and eviction terms.Legal Review: Have the lease agreement reviewed by a real estate attorney to ensure compliance with local laws.Tenant Screening:Background Checks: Perform credit, criminal, and eviction history checks on prospective tenants.References: Contact previous landlords and employers for references.Property Management:Regular Inspections: Schedule regular property inspections to ensure it's being maintained properly.Maintenance Fund: Set aside a reserve fund for unexpected repairs and maintenance.Moving Out of State:Communication: Maintain open communication with your property manager.

Make sure you work with an accountant specializing in real estate taxation come tax time. 

@Nallely TrejoI recommend finding a tax strategist specializing in real estate taxation.

@Phillip DixonI recommend finding an accountant who specializes in real estate taxation.

Otherwise, you pay income tax at your current marginal rate on the $100,000 distribution you mentioned, plus income tax on subsequent profits from the investment (which you would own personally).Consequently, I'd compare your projected returns net of all taxes on the real estate investment (1) based on taking a current distribution of $100,000 and holding the real estate personally, and (2) based on holding the real estate investment in the inherited self-directed IRA.