We have signed up with a private school to host an international student. The students family will pay the school and in turn, the school will issue a monthly "stipend" between $600-$800.
I asked the Business Administrator about how this "income" will be reported and he told me it will be on a 1099, under "RENTS".

I understand that anytime income comes this way, there is going to be some steep taxes owed.

My questions is HOW DO I MINIMIZE THE TAXES OWED?

If I keep detailed account of all the expenses incurred providing for the students basic needs, can I deduct them against the income?

I don't want to get stuck with a big tax bill at the end of the year.

You should post the 1099 income on hedule Schedule E, then claim all support costs for the student on that

You can also on a prorated basis, utilities and, id necessary, real estate taxes and mortgage interest.

You CANNOT claim and the Schedule E cannot show a loss.

You cannot claim depreciation on the house.