Be sure to set up Alabama as a state you also earned income in. You report the Rental Income/Expenses on your Federal return.

You will not be able to claim depreciation on the home, since you don't own it.

Major improvements can be added to the Cost Basis of the rental property. 

Click this link for more info on Reporting Rental Income/Expenses. 

This link has details on How to File a Non-Resident State Return.