I live in the United States.
If I have a family member (brother) occupy a section of my primary home on not-for-profit basis (just to cover expenses), need I claim that part of my home as rented when I sell, impacting cap gains & depreciation recapture?
I would be "renting" (the brother is occupying) part (20%) of my home on a not-for-profit basis. The "rent" is below fair market value, and only designed to cover expenses.
As I understand it, the IRS wants even this type of situation to be reported as income on Line 21 / Other Rental Income.
If I collect funds from the brother and report it on line 21, will I lose capital gains exclusion on the 20% and need to pay depreciation recapture on the 20% of my home occupied by him?