OK ... the TT program doesn't handle this situation easily and can be quite confusing when you rent out part of a personal residence. So is this truly a rental situation or just a cost sharing situation among friends? If a cost sharing then you should not report any of this at all on any tax return.
If it is a true rental situation then you need to follow the interview screens very carefully so that the non profit rental is reported correctly ... the depreciation will be limited as will the mortgage interest & RE taxes ( this will be split between the Sch E and Sch A so make sure those are not reported twice in full). If this is your first year of renting then you really should be using a paid tax professional or upgrading to one of the LIVE options so the return can be done correctly and you can get educated on how to handle this in the future.
