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Investors & landlords
Depreciation is the allowance for wear and tear on assets that generally have a life of over a year. It is a deduction allowed for taxes and in general accounting. Often times the allowance for taxes is different than used for financial accounting.
Passive Activity is another section of the code that limits the losses from "passive activities" to the income of passive activities. The definition of passive activity is done in law, and may be different from what you might expect it to be. For example, you might think interest and dividends are passive....but they're not, they're considered portfolio/investment income and are NOT passive income.
This is a complicated area of the tax law. Rental income is defined as being passive income and any losses from rental property may be limited. Thus if you have rental property, that is passive and you have to follow the rules of passive activities. However, if you provided sufficient services, such as a hotel, then it would not be passive.
Below is a link to Publication 925, Passive Activity and At-Risk Rules. I highly suggest you read the pertinent parts for your rental property, as well as if you would be considered a real estate professional, and whether you materially participate or not.
https://www.irs.gov/publications/p925
https://www.irs.gov/pub/irs-pdf/p925.pdf
Residential Rental Property
https://www.irs.gov/pub/irs-pdf/p527.pdf
Form 8582 is the Passive Activity Loss Limitation form, if it is applicable to your properties. Most rental properties show a tax loss in the early years; so this may indeed apply to you.
https://www.irs.gov/pub/irs-pdf/f8582.pdf
https://www.irs.gov/pub/irs-pdf/i8582.pdf
Good luck.