Can I deduct any rental expenses such as utilities, real estate taxes, etc. if I rent out a portion of my home to a parent all year and still live in the home all year?

[LinaJ2018 · Accepted solution]

Did you rent to your parent at below fair market value?

If you rent at the fair rental price, you are considered having rental income and expenses for business use.  It is considered as a rental business.  You are required to report the rental income and deduct related expenses on a Schedule E. 

If you charged rent at below fair rental price, it is not considered as a rental property for business. Instead, it is treated as a personal-use property, therefore, the rental income received is nontaxable and no rental expenses are allowed for deductions. 

However, you do need to report the income as other income on 7a of your 2019 Form 1040.  IRS considers this as a hobby. Starting in 2018, you cannot deduct any related expenses on your taxes. 

[Edited 3/10/2020 |  4:08 PM]

[jamjohn]

Since I use this unit also for personal use all year, are there any expenses that I can deduct. The response did not answer my question about related expenses that can be deducted when I also live there full-time. I rent out at a fair rental price.

[LinaJ2018]

When you rent a room at the house, the rules apply the same as if you rent entire property. All you do is to divide certain expenses between the rental section and personal.  so any rental portion goes on Schedule E like property taxes, utilities, management etc.  You can only deduct utilities for the rental portion, not on schedule A.