everything id OK if this other person is on title. they can report all income and expenses
if this person is not on the title and/or mortgage, you have a tax issue. you should be reporting the rental income, expenses other than mortgage interest and depreciation. in addition, you may have missed filing gift tax returns if, the rental income exceeded $15,000 for the year.
as to mortgage interest, "The legal owner of the property that has been used as collateral to secure the mortgage for the property and makes the payments would be the only one that can legally take the deduction".
so if this other person, is not on the title, this person is not entitled to the deduction for the mortgage interest but you may be able to.
