Renting to daughter & boyfriend at below market value but not itemizing or claiming rental deductions.. help?

[sallyryna]

I retired in 2021 and we moved from CA to OH.  We still own our CA home, but rent it (for MUCH lower than market value.. just to cover the mortgage) to our daughter and her boyfriend.  I read Pub#527, but I'm not doing any deductions for rental expenses, etc. and they used Zelle (which is excluded from the new 1099-K reporting laws) to transfer their rent $$ to my bank account.  Since I'm NOT itemizing, and NOT renting for profit do I even need to report the amount they paid as rental income?   Not sure what to do here, and don't want to complicate things unnecessarily (but also don't want to miss something then get dinged later!).  Any help appreciated...  

[mikafeed58]

According to the IRS, renting to relatives may be considered personal use even if they're paying you rent, unless the family member uses the dwelling unit as his or her main home and pays rent equivalent to the fair rental value.

As you cited in your question, this matter is covered in IRS Publication 527. The key takeaway from this Pub is that they are paying below fair marker value and therefore any income reported would be exhausted by your expenses resulting in a loss which in your case would not be deductible. So in essence it is a "wash."

You may find the following link helpful:

https://www.irs.gov/faqs/sale-or-trade-of-business-depreciation-rentals/personal-use-of-business-pro...