So in this case do you think its better to list as one unit ?
In my personal opinion (and we all know what those are like.) no. I'd treat and list each unit as a physically separate rental property. So on the SCH E unit one would start on line 3 column A, and unit two would start on line 3 column B. The totals for everything end up exactly the same on lines 24, 25 & 26 either way.
And is it legal to do so?
It's legal either way. The IRS cares about the "bottom line". They don't care how you get to that bottom line.... so long as it's correct end the end.
