Generally, it doesn't matter so long as it's consistent year to year. It also matters what type of partnership you have set up too.
Generally, when 2 people who are not married to each other own rental property, they set up a partnership and the partnership income/expenses get's reported on an IRS Form 1065-Partnership/Multi-member LLC tax return. Each partner is issued a K-1 which is required for each partner to complete their own 1040 personal tax returns.
However, with rental property you can each claim a percentage of ownership, and you are given the choice to split income/expenses based on the ownership percentage, or to let the program do the splits for you. The downside of this is that the program can not and does not split everything. Therefore, I always recommend the establishment of a partnership. Depending on your state, registration of a partnership may or may not be required. But the partnership will need to obtain it's own EIN at the federal level.
