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 paid a fair rental price for use of the home.
Generally rental of your property to family members for less than the fair-rental-value may be considered personal use of a property. If they did not pay the "fair market rental price", then the use of the dwelling unit is considered to be personal use by the owner" and you would not report this as income.
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.
However, if you are renting the house at or above fair market value then you would report the income and expenses.
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