Rental Expenses in excess of Rental Income create Passive Activity Losses.
If you do not have enough passive income to offset these losses on your current tax return,
the losses are carried forward to future tax returns until 1) they offset Passive Income or 2) you dispose of the rental properties.
TurboTax will automatically calculate your passive losses and apply them when possible. Any Passive Loss Carryovers appear on Schedule E Wks - Carryforward to 2016 Smart Worksheet (final page - note this is a TurboTax supplemental schedule and not an IRS form).
For more info, see:
IRS Tax Topic 425 - Passive
Activities - Losses and Credits
IRS Pub 925 Passive
Activity and At-Risk Rules
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