If you rent to a family member below FMV it is considered personal use of the home, and the property is no longer considered rental property for tax purposes. In that situation, the owner would lose all deductible expenses except mortgage interest and real estate taxes. Also, the owner would report the "rental" income as "Other Income" on Line 8 of Schedule 1, and would not use Schedule E.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
