Our son takes on a roommate who is in a ministry program. We charge a well below market rent and do not charge utilities. Should we report this?

[DianeW777]

No. It sounds like you fall into a 'Not for Profit' rental situation. See the details below.

Not for Profit Rental:

If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year.

If you never depreciated the property due to the intent of not for profit during any and all rents, then there is nothing to recapture when you sell your home.

• IRS Publication 527