I have a home that has a house in the back for years I stayed in the house in the back and rented out the main house in the front. I am now living in the house in the front and my sister lives in the back house. She does pay me to help with the mortgage, but it is way below Fair Mkt Rent. I would like to claim the entire house on schedule A instead of the part my sister lives in as Sch E. Can I do this ?
Yes, because your sister is paying less than fair market rent, it is considered "personal days". You so not have to report the income, and you can deduct the interest etc on your Schedule A. Per IRS:
If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function isn’t considered to be rental and it shouldn’t be reported on Schedule E (Form 1040). You aren’t required to report the rental income and rental expenses from this activity. Any expenses related to the home, such as mortgage interest, property taxes, and any qualified casualty loss, will be reported as normally allowed on Schedule A (Form 1040).
Basically what you have is a cost sharing arrangement. The fact this arrangement is will a blood relative usually makes it easier to substantiate - especially if the relative is not married. From what I see, you have no reason to convert anything to a rental or to report the income from your sister. Just consider the entire property your personal residence and claim your mortgage interest and property taxes on SCH A.