Q. Is the (significantly less than normal rental) cost-sharing amount considered as "rental income" in the eyes of the IRS?
A. No.
Q. If not, what type of "income" would it be considered?
A. It is not income, at all.
Q. Is it even considered "income" at all, since it is simply splitting bills and other costs of living at a given residence?
A. No.
If this is merely a cost sharing arrangement where the amount paid is below fair market rental, there would be no reportable income to you. If the “rent” amount is fair market value, or more, there is still some question as to whether you even have to report it, as it almost always comes out zero. Most people take the attitude that it is not income; it's just room mates sharing expenses and ignore it. Family, as opposed to unrelated roommates, makes that position even stronger.
