So if they have a $100,000 loss and there is 40% depreciation, the claim check will only be made out for $60,000 (less the deductible).   

And if not, where should they be deducted?

Deduct your late fees from the amount paid the following month.

I deduct the interest from the rental fee each year if the tenant decides to renew. 

Insurance and interest make it difficult for the traditional lenders to loan to us even though we can afford the payment, but to them since we deduct a lot of things on our taxes, we don't look to be cash flowing.

From that deduct the deposit (so that they know they won't be getting that back). 

You can also use a bank statement loan or SE program to use gross deposits versus taxes that have deductions.

Essentially you are plugging in all of your data and they are using market price studied to generate your deductions.

Rent check comes, deducting the "$220 plumbing bill" with an invoice for $220 from "Tony's Plumbing" with no phone number, address, or anything else.

For newly constructed, purchased or renovated properties and also retroactive generally over the last 10 years, building components are properly classified into individual units of property and accurate recovery periods for computing depreciation deductions.