Understand that all rental activity is passive. THerefore rental losses can only be deducted from rental income. Once those losses get the taxable rental income to zero, that's it. You're done. Any excess loss is automatically carried over to the next year.
It is *extremely rare* for rental property to actually have tax able rental income at tax filing time. Particularly if there is a mortgage on the property. Just the allowed deductions of mortgage interest, property insurance and the depreciation you are required to take by law, is usually enough to "zero out" the taxable rental income.
Add to that your other allowed and deductible rental expenses and that's what makes it rare to ever have taxable rental income. So it's much more common for your passive carry over losses to continue to increase with each passing year. You can't actually realize those losses until the year you sell or otherwise dispose of the property.
