First rule of income tax is that all income from whatever source is taxable unless there is a specific exception.
There is an exception for gifts. https://www.law.cornell.edu/uscode/text/26/102 But what you describe is not a gift. There are lots of cases about this but the bottom line is that a gift giver makes the gift because they want to not because they are getting something. It is the whole situation that determines whether or not they are getting something. Here your parents are clearly getting something. See, e.g. https://en.wikipedia.org/wiki/Commissioner_v._Duberstein
So you do need to declare the income. The question is how? Frequently rentals to family members are not intended to make money. Rather they are intended to help the family member while paying off the property expenses. These are "not for profit" rentals. That is probably a good way to go. You can deduct the expenses but only up to the rental income that you receive. I don't believe you need to depreciate either, which means your basis for eventual sale won't change. (but verify that).
[Please realize, since many people don't, that a mortgage is not deductible in full because principal payments simply reduce the balance owed. (e.g. you pay $1000 mortgage payment, $900 interest, $100 principal. $900 is deductible as a rental expense (or if you live there itemized deduction), $100 is not. But you have in essence moved $100 from your bank account into the value of the house. If you sell the house you get that $100 back. So you don't get to deduct it.]
Anyway this this is a long previous discussion about non-for-profit rentals. I suggest you read it in depth and ask again if you have followup questions.
https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/17a-what-is-not-for-p...
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