The rent you receive is taxable income, even if you are charging less than fair market value in rent. If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year.
Where to report. In this case you won't report your rental activity on Schedule E or through the interview for Rental Properties in TurboTax. Report your not-for-profit rental income by going to
Federal Taxes>Wages & Income>Less Common Income>Other Reportable Income. If you itemize your deductions, you can include
ALL of your mortgage interest and real estate taxes as a second home in TurboTax.
