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There are different rules for Not for Profit Rental and Personal Use Rental.
You are considered to use a dwelling unit as a home if you use it for personal purposes during the tax year for more than the greater of: 14 days or 10% of the total days it is rented to others at a fair rental price.
A day of personal use of a dwelling unit is any day that it is used by:
Numbers 2 & 4 above hit right at your situation. You have family members and others living in the property that you are not collecting a Fair Rental Price from on their use of the property.
You will not be able to deduct your rental expense in excess of your gross rental income. If you itemize your deductions on Form 1040, Schedule A, you may still be able to deduct mortgage interest, property taxes, and casualty losses on that schedule. As far as the expenses go you can only subtract from the rent that is paid you for their use of the property. This means that you may not show a loss against other income. The additional interest and taxes that you pay on this property will increase your Schedule A itemizing. If you are deducting what you are allowed and you are collecting the mortgage at least from the parties using your property then you should not be seeing a tax increase form the property but you will not see the use of it reducing any other income you have as a rental loss either.
I sincerely XXXXX XXXXX could advise you differently,
Just to clarify - I did not use Schedule A to show the mortgage interest, or property taxes last year - I was using schedule C - since this really isn't a business, should I be using schedule C or just A?
You need to how the interest paid and taxes on Schedule A.