Aleatha and her sister, Jen, share an ownership interest in a residential rental property. They have never formed a partnership, but they both participate in the management decisions related to their rental real estate activity. Choose the response that correctly completes the next sentence about how the income and deductible expenses from this rental real estate activity should be reported. Aleatha and Jen must: Determine how the income and expenses will be allocated by December 31 of the tax year. Determine how the income and expenses will be allocated by the due date of the return. Each report their proportionate share of income and expenses on their individual tax return. Formalize the details of this arrangement in a partnership agreement. They should then file a partnership return, and the income and expenses should be reported on Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation