Both are options. You need not worry with option #1. Option #2 may need some explaining if you are audited. In my previous link, I gave you the example of someone's girlfriend moving in as a roomate. They would share expenses. Your situation is not so cut and dried. You are showing income in your bank account. Sometimes, when someone takes a roomate, they each pay a portion of the cable, electric bill, rent, etc. Again, this is not your case. In my opinion, you are renting a room. But that is just my opinion.
