1. No, you report what you paid the manager as an expense on your Schedule E.
3. Security Deposits should never be reported as income, you're just holding the funds.
If you keep the security deposit for damage, the security deposit is then claimed as income, and the repairs for the damage as an expense.
2. This depends on whether you are filing Schedule E or Schedule C.
Schedule C is for a Sole-Proprietorship. This would be a situation for someone in the business of maintaining and managing rentals for a living. The "Real Estate Investor" you mention earlier most likely filed Schedule C and performed services relating to rentals as his form of Self-Employment. He would pay Self-Employment tax on his income and also have a wider array of Business expenses.
You, on the other hand, are receiving "passive" income. You don't do the daily tasks involved with the rentals, you say you have a manager for that. You are NOT subject to Self-Employment tax on the income. Your phone and internet expenses do not sound as if they are ordinary expenses claimed on Schedule E, but if you have a log and can prove to the IRS that these expenses were required, you could expenses them.
HERE is an IRS link about rental income
HERE is a TurboTax link about reporting rentals on Schedule C or Schedule E
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