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Normally if you are renting space in your home to someone then the rental income would be reportable to the IRS. But this does not necessarily sound like a typical rental situation. Your mother in law has now become a member of your household. If the money she gives to you is to reimburse you for her share of groceries and other expenses which you have incurred on her behalf, then that is not rental income.
Also, keep in mind that under IRS regulations every individual is allowed to give another individual up to $12,000 each year without any gift tax or gift reporting required. That means your mother in law could give you and your husband a gift each year of up to $12,000 each with no gift tax or reporting requirements. How you choose to use that money is then up to you.
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