Passive expenses and deductions can only be taken against passive income. Once those passive expenses get the taxable passive income to zero, that's it. You can't deduct any more. If there's any remaining passive expenses they are carried over to the next year.
Now it is common with rental property for passive losses to increase with each passing year as prior year losses are carried over, and current year losses add to it. You won't be able to realize your passive losses until the year you sell or otherwise dispose of the property or asset that produces the passive income.
