Incorporating a California rental property in Nevada
First of all, if you are looking to form an entity for a rental property in California your entity would have to be registered in California either as domestic of as foreign entity. That would pretty much eliminate the benefit of forming it in Nevada.
There are two ways to approach the business of rental properties:
1. you can own it as an individual and save all the trouble of forming a legal entity and maintaining it. Disadvantage - you become personally liable for this business, which is always a bad idea.
2. form a legal entity (preferably an LLC) and use it to own your rental property. Each rental property you control should be held in its own LLC for better protection. Disadvantage - the cost of forming each entity is around $400-$500, and the annual maintenance could come to over $1500 a year, between the $825 franchise tax plus annual report, and the cost of bookkeeping and filing a tax return.
As far as tax benefits go - LLC is a pass through entity, so in essence its the same as being a sole proprietor. The advantage of forming an LLC is primarily for limited liability protection, not necessarily for tax benefits.