You do not need the property to be in an LLC or business entity to be able to take deductions, write offs, etc.

As a non-resident, you’ll only be taxed on U.S. income sources, like rental income, which you’ll report with allowable deductions.

This needs to be highlighted in the lease and acknowledged by them.Security Deposits: You can’t use their security deposit for routine cleaning, but if they leave things in bad shape beyond normal wear and tear, it’s fair game to deduct cleaning costs.I’d start by having a straightforward talk with them about the importance of keeping things clean for health reasons and property preservation.

The "Deductions" column shows their first payment and the column on the right shows their second payment.

Hallway utilities are around $25 a month and tax deductible meaning net cost around $17.50. 

And 0% deduction on expenses related to the live in unit.

Security Deposit: Follow Oregon’s rules—return deposits within 31 days with documented deductions.5.

Points will be deducted for deficiencies and remove subjectivity in the inspection process.

I can run the numbers for NOI-depreciation and this holds true, but not all of the operating expenses are deductible (or at least maintenance, vacancy and cap ex aren’t until that money is spent).

So, you're not "wrong" in thinking it's complicated.The tax code plays heavily into how certain transactions are categorized and there is some flexibility regarding what we can capitalize versus deduct.