Technically (and legally) you can convert it to rental and get quite a bit in deductible expenses that, while the rental income would be reportable, the deductions of Mortgage Interest, property taxes, property insurance, depreciation and other expenses would negate the taxability of the reported income. Basically, since rental income is passive, the taxability of that passive income can only be offset by the passive losses (rental expenses). It's quite common for the losses to exceed the income every year, and those losses increase each year as they are carried over to the next. But your issue is, since renting to a relative at below FMRV, you can't carry over losses.
Then when the property is sold in the future all that prior years of depreciation has to be recaptured and it's taxed in the year you sell the property. So with the depreciation recapture, a property purchased for $100,000 will have about $20K of depreciation over 10 years. So if you sell the property for $150K in 10 years, you have more than a $50K gain. With the recaptured depreciation you actually have a $70K gain. It's taxable, and that gain combined with all your other income will most likely put you in a higher tax bracket.
In the year you sell, all carry over losses are "realized" and can help reduce the amount of taxable gain. But since you would be renting to a blood relative at below FMRV, you wouldn't have any carry over losses to help reduce that taxable gain. So you'd pay taxes on the full gain, as well as on the recaptured depreciation.
So based on your specific situation I would recommend you not convert it to rental, treat it as a 2nd home, and consider any money received from mom and dad t be a gift, and make sure the amount of that gift does not exceed $14K from each parent, for each tax year.
