My 1099MISC for rental property that includes the security deposit. do I report only the amount for rent? or do I indicate the security deposit somewhere else?

No, you enter the information as it appears on the 1099-MISC. When you enter your business expenses in the Rental Income & Royalty section, there is a section where you can type in specific expenses. The type in the section is where you will enter the security deposit. This will offset the 1099-MISC income. 

A security deposit is not income for the landlord. It belongs to the tenant and must be returned to the tenant, unless there is a basis to deduct from the deposit pursuant to Civil Code section 1950.5.