If these are long term rentals (not Bed and Breakfast or Hotel type) then the correct form to report your income and losses is the Schedule E. Rental losses are classified as passive losses. Passive losses can only offset other passive income. Without passive income, your rental losses become suspended losses that you can't deduct until you have sufficient passive income in a future year or sell the property to an unrelated party. You may not be able to deduct such losses for years.
Property owners with modified adjusted gross incomes of $100,000 or less may deduct up to $25,000 in rental real estate losses per year if they "actively participate" in the rental activity. In general, you actively participate if you are involved in meaningful management decisions. This $25,000 allowance is phased out for taxpayers whose MAGI exceeds $100,000 and eliminated entirely when it exceeds $150,000.
Losses can be taken when one sell the property at FMV or when there is other passive income.
In Turbo Tax during the interview, if you materially participate in the rentals, make sure you answer the questions correctly. ( for example, work at it for a minimum number of hours each year--usually 750 hours) This will allow some of the rental loss to be deducted-depending on your income. See Real Estate for more detailed information.
