I would consider this active trade or business as it is the taxpayers only source of income.  The only way I can get it to work is to add it to line 3b on the Depreciation Options tab. I would have assumed I could have checked a box somewhere on the Schedule E worksheet. I am curious if this would cause an audit issue. I have never manually entered anything here and if I override 3a, I receive an error disallowing efile.