If you have a rental property that you rented for less than the fair market price, you should not report it on Schedule E (Form 1040) Supplemental Income and Loss. Instead, you should report this income on Line 5 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income, and should report any related expenses on Schedule A (Form 1040) Itemized Deductions.

Per IRS Publication 527 Residential Rental Property, page 16:

Not Rented for Profit

If you don’t rent your property to make a profit, you can’t deduct rental expenses in excess of the amount of your rental income. You can’t deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year.

Where to report. Report your not-for-profit rental income on Schedule 1 (Form 1040), line 8. If you itemize your deductions, include your mortgage interest and mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses from your not-for-profit rental activity when figuring the amount you can deduct on Schedule A.

Presumption of profit. If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit.

To enter your not-for-profit residential rental income in TaxAct:

1. Sign in to your TaxAct account, then click the My Tax Returns tile.
2. Locate the relevant return, then click Open Return in the Actions column for that return.
3. In the left navigation bar, click Federal.
4. In the Federal Quick Q&A Topics panel, click Other Income > Prizes, awards or other miscellaneous income.
5. On the Miscellaneous - Amounts Received screen, in one of the Other Income entries:
   • In the Description field, enter "Not-for-profit residential rental"
   • In the $ field, enter the relevant amount of rental income.
6. Scroll down, then click Continue.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.