It depends on whether she is paying a fair market value for the rent. If so, you must treat it as an investment property, and you can deduct the property taxes, mortgage interest, and other rental expenses from the rental income you receive. In addition, you are required to depreciate the property. Otherwise, you can treat it as a second home (not a rental property), and can deduct property taxes and mortgage interest on Schedule A. You don't depreciate the property in that case, nor can you deduct other expenses. See IRS Tax Topic 415
https://www.irs.gov/taxtopics/tc415.html