They can choose to each report 1/2 on schedule e's and not prepare a partnership return even if it is not a community property state. I believe if  you have under ten members you can choose not to do a partnership but you have to be sure each member is reporting their share. I just always hate dividing it up as far as basis and depreciation but we have a few that do that and even some that are not married

but own property together.

Michele