Must I rent at fair market value if I can make a profit at a lower rent

[sugarspice]

Because I have no mortage, I can make a profit on my rental house a lowere than market rate.  Since I rent to my son and his friend, I would like to offer a lower rent, while still making a profit.

[TomK]

You can rent at what ever level you like... how you report that income and what expenses you may deduct are questions to consider.  Please see TurboTax TaxPro Diane's response to a similar question: https://ttlc.intuit.com/replies/6717652

Pub. 527 - Residential Rental Property: https://www.irs.gov/pub/irs-pdf/p527.pdf

[sugarspice]

@TurboTaxTomK Because I am making a profit, I believe I should qualify for using Schedule E, even if I could make more profit than I am currently...I don't believe I should be labeled a NFP renter just because the rent I can afford to charge while making a profit is below  FMV.

[TomK]

FMV can be a subjective amount (i.e., unless you charge something like 50% of the going rate of other similar rentals). You can obviously use Schedule E if you like... just be prepared to defend your position with the IRS should they question it (which they may very well not unless... again you charge substantially below FMV). Keep good records.