Rental property

[Speedy4me]

I bought a second “vacation” home on 7/10/2020.  My daughter lives there year round and pays me rent whenever she can.  She also has a roommate that has paid me monthly rent religiously since 7/10/2020.  My daughter and her roommate share the house equally through the year.

1.  I’m reporting as passive income all the roommate rent money.  Do I need to report any rent money that I receive from my daughter?

2.  Since my daughter and her roommate share the home equally throughout the year I’m assuming I classify the property as personal use at 50% and as a rental property at 50%.  That said, I would only deduct 50% of all rental expenses paid like mortgage interest, property taxes, utilities, maintenance expenses, etc, correct?

[Mike9241]

I would say you are correct. 

50% of the mortgage interest is not deductible because it is not your primary or 2nd residence and you are renting to your daughter at less than FMV. however, 50% of the real estate taxes would be deductible on schedule A subject to the limitation for state and local taxes.