It depends. If you rented the property for 14 days or less, you are not required to report the income. With more than 14 rental days, you would report the income in one of two places:
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Schedule E, if you provided a place to stay and nothing more.
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Schedule C, if you provided services like a hotel.
Please refer to 10 Tips for Airbnb, HomeAway & VRBO Vacation Rentals for details.
You can report the property as a rental even if you do not own it (simply answer "no" to the ownership question). However, you would NOT enter the home itself as an asset for depreciation (you must own the property to take depreciation).
If you purchased new furniture, appliances, carpet, etc., for the rental unit, you may add those items for depreciation. Pay attention to the questions at the beginning of the Assets/Depreciation section regarding expensing assets that would normally be capitalized ($2,500 or less per item). This is a choice you make under the Safe Harbor Election. If you take this election, you would then enter the cost of these new furnishings as Rental Expenses.
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