Hackitoff makes a valid point. But also be aware that what constitutes below fair market is a very grey area. The way I see it, the FMRV is "what the consumer is willing to pay". So if you could have rented it to another for say $1200 a month, but you rented to a relative for $800 a month, that's a 1/3 reduction from FMRV and in my personal opinion (note, my "personal" opinion) that's undoubtedly below fair market value.
But if you rented that same house to a relative for $1100 a month, as far as I'm concerned that's not renting below FMRV because you're within 20% of the FMRV. I doubt the IRS would question that too.
