The two exceptions are:
1. You are a real estate professional who materially participates in your business, your passive real estate losses can offset ordinary income.
2. If you actively participate in your business (real estate investor), you can deduct up to $25K of those losses against nonpassive income, subject to the modified adjusted gross income phase out. If phase out applies, then you can deduct up to $3k against non passive income.
See more information in IRS pub 925
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