After doing some further research, the instructions for the M1PR have an extensive list of items that should be added back under additional nontaxable income. All forms from at least 2017 forward explicitly state the following: Passive activity losses in current year in excess of current year passive activity income, including rental losses, even if actively involved in real estate.
I rely on Turbo Tax to know and implement these rules so I don't have to read through the instructions of every single tax form.
