Attn Accountants! 50/50 "Handshake Agreement" Tax Implications

[Kyle A.]

My best friend and I have a 50/50 stake in a rental property. He has a family and kids and did not have the free time to invest in real estate so he asked me to invest with him knowing that I have the time and expertise that he was lacking. The mortgage is in his name but we have a handshake agreement that we co-own the property and will split everything 50/50. We have a checking account with both of our names on it and all income and expenses go through there.

My question pertains to taxes. We have received conflicting information from several tax accountants. Our thought was that we split everything 50/50 including all expenses and depreciation. This is how both of our individual accountants agreed our taxes should be filed on the schedule E. However, we had another accountant say that I am not allowed to depreciate expenses because I'm not on the mortgage. I am only responsible for reporting my rental income on a schedule C. Is he right or are the other 2 accountants right? Why so much conflicting information?

Thanks in advance!