We rented out our basement for 7 months. It consumes 27% of our total usable space. The amount charged was about 1/3 of our mortgage. Seems that IRS TC414 states that when you are not in the business of renting, but have rented temporarily a space that is yours, you can fill in the 'income' on line 21, and the 'expense' on line 36, but no further direction is given.
Furthermore, schedules c and e seem to be in that document for those who are actually running it as a business, or the property is a defacto rental, not a personal use space temporarily rented out.
Here is the relevant text I'm looking at:
Personal Property Rentals- Report income and expenses related to personal property rentals on Form 1040, Schedule C.pdf or Form 1040, Schedule C-EZ.pdf, Net Profit From Business (Sole Proprietorship), if you're in the business of renting personal property.
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Report income on line 21 and expenses on line 36 of Form 1040.pdf, U.S. Individual Income Tax Return, if you're not in the business of renting personal property. <<-- This is where we qualify
