It is an offset against all other types of income, not just dividends

However, if you did not "materially participate" in the rental business your losses might be limited by the (very complicated) passive activity loss rules. In that case the losses are "suspended" until there are other passive gains or you dispose of your interest in a fully taxable transaction. Then they are "allowed."

For more information see https://www.irs.gov/forms-pubs/about-publication-925 and in particular https://www.irs.gov/publications/p925#en_US_2020_publink1000104568

Be sure to answer TT's questions about material participation carefully and understand what the terms mean.

Thanks for the reply. I am just investor. Are the stock dividends not considered passive as well? I didn’t actively participate in the company either.

Yes dividends are passive. But dividends are income and income is always taxed (assuming not inside a retirement plan or certain other exceptions). It is only passive activity losses that might be suspended. 

And losses from stock investments (capital losses) are limited to reducing other gains or $3k of non-gain income.

What about the normal capital gain from stock sales (short and long)? Can those be offset from K1 rental losses?

I tried on TT, filled up W2, stock info which had both short term gains, long term gains and Qualified dividends. Entering K1 didn't change anything about the taxes owed.

K1 losses are more than "short term gains, long term gains and Qualified dividends".

I was hoping that these losses will offset the stock gains, but it seems like they are not.

A loss from a K-1 passive activity that you still own can only be used to offset gains from other passive activities. A passive activity

means any activity—
(A)which involves the conduct of any trade or business, and
(B)in which the taxpayer does not materially participate.

I.R.C. 469(c)(1) https://www.law.cornell.edu/uscode/text/26/469

So I think a normal investor buying/selling stocks is not in a trade or business. A day trader without any other job might be.

There is an exception for rental activities if your income is less than $150k and you actively participate in the activity. Active and material participation are legal tax terms of art and are very complicated.

See also https://www.irs.gov/forms-pubs/about-publication-925

When the passive activity is full disposed of all of the suspended losses are allowed and can offset any income in that year.

These rules 

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