Translation:Does your teacher live in Taiwan?
I believe that question would be written: 你的老师住在台湾哪儿? However, the question as written calls for an answer of "yes" or "no" due to the use of 吗 as the final word, leading to the translation "Does...?" "Is your teacher living in Taiwan?" probably would get accepted too. Remove 吗 and you will get the statement, "Your teacher lives in Taiwan."