Joan was given a temporary assignment in June that would take her away from home until December 23 'd and decided to rent her house for the six months she would be gone . Joan's best friend , Jean , had a daughter , Annie , who just graduated from college and was looking to a place to rent until December . Since her house was completely paid for Joan decided not to rent the house at fair market rental value . Joan charged Jean's daughter Annie , just enough rent to pay the utilities each month . Where should Joan report the income she received from renting the house ? a ) Schedule E ) Form 1040 , line 21 ( ) Schedule C d ) Joan does not have to report the rental income