Passive income carryover Unallowed Loss creating negative income

[MG26]

TT is carrying the whole unallowed loss from last year. It creates a negative income. Am I supposed to change the amount to equal my current income (making income zero) and will it create a carry forward amount? Am I supposed to be using the whole amount? Will it go into NOL category?

Schedule E lines 24-26

Income                               6,482

passive loss carryover -13,831

total real estate loss       -7349

[DavidD66]

The "total real estate loss" of -,7,349 will flow back to Form 8582 - Passive Activity Loss Limitations.  It will carry forward and be available next year.  It will not create a Net Operating Loss.