Every state tax return is different but ultimately you will only be taxed on your rental income.You may or may not pay tax on the rental business depending on if you are in an income or loss position.You will file a California resident tax return because you are a resident in the state.You will report your "world-wide" income on your california return which includes all the income you earned such as from your W-2, 1099 and even includes the income from your out-of-state rentals.To avoid double taxation - California will provide you a credit for taxes that you pay to other states.

S-Corp's have double taxation while LLC's do not. 

@Jim PeretDid the CPA help you run the numbers and see what the impact of UDFI taxation on the leveraged gains would be?

Myth 2: It is wise to constantly leverageTruth: You don’t make much when the smoke clears Don’t borrow against your house to invest in stocks, taxation hurts.

Due to some extremely complex tax issues I'm trying to sort out (double global taxation USUK) , passive conventional rental real estate is not that viable for me right now.

This was because apparently New Zealand has lower taxes for property buyers, and even no Stamp Duty tax at all, not to mention the fact that NZ property prices are lower in general than in Australia.

The issue and difference between the plans is that the IRA is subject to UBIT taxation on Unrelated Debt-Financed Income (UDFI). 

I will start my response by stating I have zero knowledge of Canadian taxation, but figure you may be taxed there no matter where the income was sourced from.

If the sale proceeds have to last the rest of her life, she'll want to make absolutely certain she's exploring all her options (not just the ones that work better for you).Also, be mindful that Grandma is going to need serious taxation, asset protection, and estate advice, at very least.

They're similar, but they have distinctions that should be explained by a lawyer, and I'm not one.Which one of them is easier for financing is a question for - you guessed it - a lender, and I'm not one, either.For tax purposes, partnerships and JVs are the same: a partnership.A partnership may choose a different form of taxation, such as an S-corporation, for some specific tax benefits down the road, as @Ashish Acharya referred to.