If it's a duplex, I'd keep reporting those as separate units.  It also helps if your client ever sells one unit and keeps the other, or retires one to move in as his/her residence, etc.

Hi itonewbie,

thanks, it is duplex.

I agree it is better to separately report on Sch E in case they do condo conversion or move into one unit.

But mortgage loan person question why report separate

That can be easily explained.  Everything is above board and consistent with tax law.  Perhaps the question to that person is why this should be a concern.

Didn't Art Linkletter used to have a television show called "Mortgage Loan People Say the Darndest Things"?

Your response reminds me of those old late night infomercials from a bygone era that ask people to buy programs that teach them how to get rich quick by buying foreclosed properties.