Yes. This income is reported as rental real estate income. You can report it by using the steps shown here.
You can determine the cost of the garage for the rental portion by using the rental space square feet divided by the total square feet of the garage or the entire property if there are more buildings, and the garage was not purchased separately. This rate will be used to figure out the portion of your purchase of the entire property that is for the garage portion of cost. Be sure to deduct the land value before applying the percentage because land is never a depreciable asset. This can be used for depreciation of the building.
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