Passive loss and carryover losses are a very complicated area. Basically, if you are involved in a defined "Passive" activity...or, an active activity that you don't participate in, those are passive activities.
When those activities result in a loss for the year, generally you can only deduct those losses against defined passive income. If passive income isn't sufficient to absorb the loss, then the remaining loss is carried over to the next year, and so on.
For a better and complete explanation of passive income, passive losses, suspended passive losses, see IRS. Publication 925
https://www.irs.gov/pub/irs-pdf/p925.pdf
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