Rental income is passive. Passive losses are generally applied only to passive income. After that, excess passive losses are carried over to the next year. Typically, those carry over losses will increase with every passing year, and that's normal. You can't realize those losses until the year you sell the property.
Now with the TCJA enacted in 2018, you can deduct up to a maximum of those passive losses from other ordinary income "IF" you meet the criteria. The TTX program takes care of this automatically. If your income is to high, you do not meet the criteria. Otherwise, the TTX program takes care of it automatically and you don't do anything special.
One key thing is that you have to actually have the "other" taxable income to claim those passive losses against. IF you have other deductions that get that other taxable non-passive income to zero, then you have nothing left to claim the excess passive losses maxed at $25K against. It just gets carried over.
