Report the rental income/expenses in the rental section, as you normally would. Some screens will ask you if you are renting at below FMV, and ask you if you are renting to family. If you indicate you are renting at below FMV then the program will take care of things for you.
You still enter all your expenses, even if they exceed the rental income. The program will take care of any splits required. (if any are required) between SCH E and SCH A.
Also note that the program will take care of disallowing any carry overs if you are in fact, renting at below FMV. One possible issue with this, is that if you were renting at FMV in the past which allowed carry overs, then the first year you rent below FMV, you lose all those past year carry overs permanently and forever.
