Passive activity losses can only offset passive activity income. Since you acquired this property in 2021 and have Rental losses, these will be carryovers to 2022 instead of impacting your 2021 return. If you have income from the property in 2022 the losses will offset the income up to $0 and any remaining loss will carryover to 2023. If you have additional losses in 2022, these will add to the carryover to 2023.
If you still have carryover losses on your return when you dispose of the property, the loss will be recognized against the disposition up to certain limitations.
Please see Passive Activities for more information and additional links.
@CD46
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