You report ALL your income, Schedule C & Schedule E on your personal 1040 tax return. Also schedule B & D for investments, etc. If you have a loss on schedule C it will offset your other income. There may be limits if you have a loss on schedule E.
If you have a loss on Schedule D......If you have investment sale losses, after you subtract the losses from your gains you can only deduct up to 3,000 (1,500 MFS) per year. The rest you will have to carryover until it is used up. You can't skip a year.
EDIT for schedule D
