Stella owns a duplex with one unit as her residence and rents the other unit short$-$term. In $2024,$ she rented it fully furnished for $196$ days, providing daily cleaning and fresh linens. How are the rental income and expenses reported on her tax return?

Income and expenses are reported on Schedule C $($Form $1040).$

Income and expenses are reported on Schedule E $($Form $1040).$

Report income on Schedule $1($Form $1040),$ line $8$z$.$ Expenses are deducted on Schedule A $($Form $1040).$

Report income on Schedule E $($Form $1040).$ Direct expenses are deducted on Schedule E $($Form $1040),$ and indirect expenses are deducted on Schedule A $($Form $1040).$