you own the property. therefore I conclude, you must report all income and take a deduction for the fees the other keeps. You would even have to file a 1099 to report that since he is a US citizen. where you benefit and you must - is by taking depreciation on the foreign property. it will have a 30 year life. depreciate straight line. if you fail to take the depreciation you are entitled to, when you sell, the IRS would say you have taken the depreciation and must report the sale on that basis. The rule is the larger of depreciation allowed or allowable.
