We have a property that we rented at FMV for several years, currently we are renting to family members at below FMV. Since we have property management we get a 1099-misc. I have been trying to figure out where to list this. It is box 3 rents, so when I list it as a 1099-misc it asks me about FMV and then shows up in the rental section of the program...but I'm told not to list expenses on below FMV property there. I'm taking standard deduction and apparently we cannot list expenses on Schd A anymore in any case.
Is the answer to list the entire amount in other reportable income as some have suggested or is it true that I can list the expenses on Sched E and that the program will adjust them to be no more than the income? I have used depreciation on the property and some things such as appliances in the past, I don't need to use those as an expense this year but do not want to lose the ability to depreciate when I return to FMV in the future. Any helpful knowledge about this puzzle piece in my return is appreciated.
