Co-investing in SFR: appropriate way to account for taxes

[Arthur Zhou]

My friend and I plan to buy a property together. I'd be a general partner making all the managerial decisions and only my name would be on the mortgage, while my friend would be a limited partner who would contribute to the down payment and get a cut of the monthly cash flow. For those of you who have bought an SFR investment property with a co-investor under this type of arrangement, could someone help me answer the following question?

Since the property would be solely under my name, I'd pass my rental income through my 1040 come tax season. Every month, I'd like to send my friend a cut of the monthly cash flow. In order to abide by US tax laws, should I count this monthly cash flow as an expense on my own return while my friend reports these monthly payments as ordinary income that are subject to tax on his own 1040? In this way, none of the property's cash flow would be double taxed.