The problem was not with the memory of report builder but with my code. i changed the code to the following and it worked:
public void InsertLineBreaks(List<LineChart> inputList, int sampleInterval)
{
List<LineChart> breaklinesList = new List<LineChart> { };
for (int i = 1; i <= inputList.Count; i++)
{
if ((inputList[i].X - inputList[i - 1].X).TotalMinutes > sampleInterval)
{
LineChart breakline = inputList[i];
breakline.BreakLine = 1;
breaklinesList.Add(breakline);
}
}
inputList.AddRange(breaklinesList);
}