I haven't rented out a basement, but I did rent a basement for awhile to live in. When my wife and I separated, I needed to find a place relatively quickly and affordably, with a limited lease, to get my bearings.

I found a townhouse, owned by a 20 something female lawyer. She lived in it, rented an upstairs bedroom to a 20 something female social worker. I got the basement.

Had my own bathroom, but had to share the kitchen on the first floor. Common laundry area was also in the basement, a room separate from mine.

I signed a 6 month lease. Shared all utilities on even 3 way split.

It worked for me, gave me some time to get my bearings.

You'll want to check with your insurance company and let them know. Make sure you're compliant with all town/community/HOA laws, rules and regulations regarding this.

One thing to remember, legally, and for insurance reasons, you will need to have egress/window large enough for an adult to get through to get out in case of fire or other emergency. The basement apartment I had had such a window, essentially ground level, and I had a step stool under it in case I needed it to get out.

The rent will be reportable income. Assuming you do pay taxes as required, you'll have to start paying taxes quarterly.