Is it taxable: rented out a room for less than market value

If you have a rental property that you rented for less than the fair market price, this would be reported on Line 8j of Schedule 1 (Form 1040), and the expenses are reported on Schedule A, if you itemize your deductions.

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.

See IRS Publication 527 Residential Rental Property, page 16.

This will be reported in TurboTax like this:

1. Click on Wages and Income at the top of the screen 
2. Scroll down to "Less Common Income";   
3. click on Show More;  
4. click on Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C;  
5. click on Start or Revisit next to Hobby income and expenses; (even though this is not a hobby, this will get the income on the correct line)
6. Do you have hobby income? say yes;  
7. You will enter the amount received under Total Hobby income not reported on a 1099-K. Do Not report any expenses here. Your expenses will be deducted on Schedule A, if you itemize, and click continue;  
8. Click Done.   

Note: If you do not itemize, you can not deduct your expenses. Expenses that are deductible are mortgage interest and real estate taxes.