Yes, this is considered a rental property. You can deduct the proportionate share of the property taxes, insurance and other expenses including depreciation for the rental space, against your rental income. All income/expenses are reported on a schedule E.
You will need to set up the rental under the Rental and Royalty section. When setting it up, indicate that you are renting a part of your home. You will be asked question on the number of days rented if less than the entire year. For the personal use days you will enter 0 if you did not ever use the rental once it was placed in service.
The rental section is quite extensive. Comment back here or post specific questions on the AnswerXchange as you go if you need assistance.
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