I'm a new landlord. I moved out of my primary house and in with my significant other and decided to keep my house as a rental. I am profit motivated and intend to continue renting my house for the foreseeable future. However, as I'm doing my taxes I'm discovering an issue; the rate I set for year one was well below fair market due to poor decision making of my own as I wanted someone in the house so that it wasn't vacant. Does this mean I HAVE to report that income on line 21 of my 1040 and take the standard deduction (my income from rental is lower than my standard deduction so I don't think it's possible to itemize my expenses for the rental) or is this a case where I can file Schedule E but I can't deduct my personal expenses such as mortgage interest and taxes because it was below fair market. To rephrase, put the income on line 21 of of my 1040 and take the standard deduction or use Schedule E but only claim the direct rental related expenses such as utilities and repairs?