My daughter moved into my rental property rent-free in the same city as my residence. Is it a rental property without zero income.

[Al-K]

My daughter's family (with children) and her domestic partner moving in without paying any rent (market rent $2200/month), The long time rental property is 2 miles away from my residence. Is it a rental property anymore or it is converted to a second residence, since I no longer receive rent. Then,  would I not report expenses or income, meaning I remove this property in TurboTax without reporting it?

Could this still count as rental property with uncollected rent as gift to each person. That is I will still list the gifts as income

Thank you for your kind reply!

[Zbucklyo · Accepted solution]

It should be treated as a second property.  You can deduct mortgage interest (assuming you don't already have a second property) and property taxes on Schedule A as itemized deductions.

[Al-K]

In TT, will I enter 365 days for personal use year after year?

Regarding distance limitation of second home, I read comment in TT 9 years old answer, that IRS does not care if the second home is next door.

[Zbucklyo]

Try that and see if it works.  Mainly, you want to freeze any reporting on Schedule E, and make sure that depreciation is not be taken. Yes, second home distance is not relevant.

[Al-K]

Excellent, thank you so much for your prompt help!