The best place for a Christmas tree in a small living room would be in a corner or against a wall, depending on the layout of the room. This way, the tree will take up less space and won't obstruct the flow of traffic. Another option is to place the tree on a table or other elevated surface, which can make it a focal point of the room. Additionally, you can decorate the tree with small ornaments and lights to make it appear more compact and cohesive with the rest of the decor.