@drdavidge wrote:
but at a rate below market rate and below our mortgage payment and taxes.
No rental expenses are able to be used if it is rented at less than Fair Market Value.
The income would be reported as "other" income (NOT on Schedule E).
Any mortgage interest and real estate taxes would be treated as if it were a second home - possibly deductible on Schedule A as an Itemized deduction (but potentially subject to limitations).
The fact that the home won't always be your main home for the entire time you owned it will affect the exclusion when you eventually sell that property (the exclusion will be prorated).
