Deduction of suspended passive losses from rental property on nonpassive income

[Rockbiter]

We sold a rental property in early 2021. TurboTax has carried forward our suspended passive losses accumulated since 2006 totaling $174K. TurboTax seems to be deducting the full amount of the losses from our combined (married, filing jointly) taxable non-passive income (e.g., wages) with no cap or phase-out. Is there something we should be doing to limit this deduction?

[KrisD15]

The passive loss would be applied to any profit on the sale, not to your ordinary income. 

Did the sale of the rental result in a capital loss? 

3,000 capital loss can be applied again ordinary income. 

Did you enter the sale in the TurboTax program? Did you report prior year depreciation for recapture?