Yes, if she is renting the home out, this is considered taxable income and it will be reported on Schedule E. If the property is rented at Fair Market Value for the area, then you would be able to claim depreciation and expenses associated with the rental of the property. The expenses and depreciation will lower the overall reported income and could potentially result in a loss.
Be aware, if you do NOT rent it at FMV, then this can be considered personal use property and you may not be able to claim any expenses. In this situation, you would only report the income.
When it comes to taxes, unless income is specifically exempt, it is considered taxable income.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
