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I purchased a home in July of 1999. Since the date of purchase I have rented a room in the home to my sister. The room is not stand-alone -- i.e., her rent gets her the bedroom and shared use of the house.

While I am confident (unfortunately) that the rent she pays me and the portion of utilities she pays me is taxable income to me, and that I can deduct mortgage interest for the entire house, I'm not sure where to report it. Schedule E covers rental income, but where should I go?

Also, can I deduct expenses attributable to that room and her use of the house (to the extent they are identifiable)?

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