Your tax return is correct. Your joint income of over $150,000 doesn't allow for any loss from the rentals to be used to reduce your income at this time. The loss was used to reduce the rental income to $0.
You have a passive loss carryover that is created when you have more expenses than income (a loss) from passive activities that could not be used this year. Instead, the passive loss is carried forward to future tax years to offset any passive income. The loss continues to be carried over until you use up the entire amount.
Passive Loss Carryovers can be created by any passive activity. Most come from rental properties (Schedule E). The Passive Loss Carryovers is on Schedule E Wks - Carryforward to 2023 Smart Worksheet (final page - note this is a TurboTax supplemental schedule and not an IRS form). You can see that in Forms View
If you had more than one property, or you didn't use TurboTax last year, Passive Loss Carryover appears on Form 8582 Page 2 Section VIII Allowed Losses.
The loss will be carried forward until you are able to use it on your tax return. This can occur if your income drops below $150,000 for Married Filing Jointly. All of the unallowed (suspended) losses will be used when you sell the property.
Please see IRS Publication 925 for more information.
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