It is not common for long term residential rental real estate to show a taxable gain every year it's classified as such. It's more common for such property to show a loss each and every year. Basically, when you add up the deductible expenses of mortgage interest, property taxes and insurance, those three items alone are usually enough to exceed the total rental income for the year. Add to that other deductible rental expenses such as repairs and maintenance costs, and you're almost guaranteed to show a loss.
Generally, once your losses get your taxable rental income to zero, that's it. Any remaining losses are just carried over to the next year where they can be deducted *IF* you have the taxable rental income to deduct them from. That doesn't happen very often either. Therefore, your passive carryover losses will grow with each passing year. You can't actually "realize" those losses until the tax year you sell the property. Then, all suspended passive losses are "released" and can be deducted from other ordinary income.
Now there is one exception. If your AGI is below a certain threshold, then once your passive losses get your taxable passive income to zero, up to a maximum of $25K of any remaining losses can be deducted from other ordinary income. But it just depends on your AGI and if you have taxable other income to deduct it from. If not, then it just carries forward again.
