If you are an individual taxpayer having losses from residential rental property, and not in the business of managing and renting properties (a "real estate professional") your losses are passive losses, and only deductible against passive income. Passive losses cannot be deducted against ordinary income from employment, a business, or investments. If you had income from another rental property, the passive loss could be deducted against that income.

In the absence of passive income, your rental losses are "suspended" and you can't deduct them until you have passive income in future years or sell the property to an unrelated party.

For more information, please see IRS Pub. 527 Residential Rental Property.