I have a question;In terms of taxation on income taxes for the IRS, how is rental income treated?

BP is a great place to pick one of us.By the way - rental taxation does not depend on whether you set up a company, as erroneously suggested in one of the earlier comments.

They want to know that the worst that they can lose is their initial investment and that they ultimately can't lose their other assets.Therefore - an entity that provides them limited liability will suffice on that end.You don't want to have a C-corp because that will not facilitate growth since you will be subject to double taxation.

Unlike corporations, where owners may be subject to double taxation (the corporation pays taxes on corporate net income and the owner pays on any dividend income they receive), the LLC itself does not get taxed.

However, you will be required to file a non-resident state tax return in the states that you own the properties.Proximity of your accountant isin't as important as getting the right accountant who understands real estate taxation.

LLCs (and LLPs) can be problematic entities for Canadians when dealing with the CRA if they are set-up as pass-through entities ... if they are being treated as a body corporate for taxation purposes, there will be less conflict with the Canadian tax authorities.I can't speak for Platinum as I've never worked with them, but I've worked with several others and brought through them.

This leads to different types of taxation. 

I believe the tax implication on depreciated portion (if no 1031) would be 25% depreciation recapture PLUS state tax....at least that is my understanding.  

@Andrew MerewitzState of LLC FormationIt is normally advised to create the LLC in the state that you will be holding the real estate; Florida in this case.If you created the LLC in New York - you would be required to register the LLC in Florida; increasing your total costs.Please also be advised that it can be costly to form an LLC in New York.Location of CPAThe important aspect of looking for a CPA is that he/she understands the taxation of real estate.Technology(emails, phones, skype) allows you to communicate properly through an accountant eventhough he/she may not be in the same city as you.Florida does not have a state income tax.

Electing S-Corp taxation for the flipping business would be done to improve your tax situation.