The real question that needs answering - "Is this a rental activity for which you should report both income and expenses, including depreciation?"
For determining whether a home is used for rental purposes or for personal use, there are several factors to consider, but the applicable factor in this scenario is whether or not the related family member (your daughter) paid a fair rental price for use of the home. If she did not pay a fair rent, you would certainly not be able to claim depreciation expense or an overall loss on the "rental". You would also not have to report her payments as "rental income"; they would be reimbursement for her share of household expenses.
The use of the dwelling unit would be considered to be personal use by yourselves.
