Since you rented your in-laws unit and receive rental income, you are required to report the rental income on your 2016 return, Form 1040 - Line 21.
Although you did not rent your property to make a profit, you may be able to deduct your rental expenses only up to the amount of your rental income if you itemize. If you itemize your deductions, you may be able to deduct your rental expenses on Form 1040 - Schedule A. Some of your rental expenses are subject to the 2% adjusted gross income limit, see Limit on Deductions in Chapter 2 of Pub. 535.
The type of items you may deduct are shown in the following article:
For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Pub. 535.
