My wife recently quit her job and I want her to meet the IRS definiton of "real estate professional" for the upcoming tax year 2004 so that there will be no limit to the amount of passive losses that I can take against my earned income.

Do I need to add her as a member to the LLC and if so will the IRS still consider the LLC a non-entity for tax purposes allowing me to continue to use Schedule E for my tax filings( my state is NC); or will the IRS consider the LLC a partnership even with the husband/wife relationship and require me to fill out a schedule C and will only half of the losses be allowed against me earned income?