Together Mr. and Mrs. Beck, who file jointly, own and operate a nursing facility in their home using the extra bedrooms. They provide maid service and meals. Where do they report the income and expenses from this activity?

1. income on Schedule 1, form 1040, on the other income line and expenses on Schedule A, Itemized deductions.
2. both income and expenses on Schedule E, Supplemental Income and Loss.
3. Both income and expenses on 2 separate schedule c if the elect to file as a Qualified Joint Venture.
4. Net income (income minus expenses) on Schedule 1(form 1040, on the other income line.