Passive losses should carryover for next years. What happens if I'm living abroad and all my US taxes are offset my foreign tax credits? I wouldn't have any taxes to pay so therefore lowering the rental income would not bring me any benefit. Can I use foreign tax deduction (instead of foreign tax credit) to offset the rental income to 0 and this way the depreciation would become passive loss and would carry over to next years until I sell the property?
