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When generating any kind of income, you are allowed to deduct all "ordinary and necessary" expenses associated with the income generating activity. So, since you had to rent the apartment in order to have space to rent out to someone, you are entitled to allocate a portion of the rent to the $3,670 that you received.
A good method for allocating rent is based on square footage. If the entire apartment is 1,500 square feet, and you rent an 10 x 10 bedroom, you are subleasing 100 square feet of your 1,500 square feet unit. you could then take 1/15 of the $43,200 rent that you paid and allocate it to the income you received. This would be done on Schedule E. Now, if there were certain amenities in the apartment that your sub-lessor was not able to use, such as a Jacuzzi tub in the master bedroom or the like, you would have to adjust the rent allocation accordingly.
Does your sub-lessor pay any of the utilities? If not, you could also allocate part of the utilities to the income you received as well.
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