Schedule E Rental Income

[Norman001]

A year and half ago, I moved out of my home to assist an elderly family member. Now renting my home out to a family friend below current market rent rates. My question is, when filling out the schedule E, what do I consider as "rents received?"  The total amount I get from the tenant or the rent amount less the mortgage. For example, charging $850/mo but mortgage is $725.00/mo. Would the difference between the 2 be considered the "rents received?"  Or do I list how much I actually charge?

Also, I am listing my annual home owners insurance on line 9. Is that correct?

1st time doing my own taxes in years!

[RobertG]

If you are renting your property at below fair market value, you should not treat it as a rental, do not report it on Schedule E.

The IRS says  "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."

You would report your net not-for-profit rental income on Form 1040, Schedule 1 line 8, Other Income.

Your rent received is the full amount of the rent you charge.  From that, you can deduct mortgage interest and taxes, and other expenses like insurance.  If you have net income after all of these deductions you report that income on Schedule 1 line 8.

Your mortgage is never deductible.  Only the interest on the mortgage is deductible.

For more information, please see this IRS link: https://www.irs.gov/publications/p527/ch04.html#en_US_2016_publink1000219164