No, rental losses will only offset rental income from the same property (until the year the property is sold). Since you didn't sell your property, converting it to personal use, won't release the losses.
However, there is a common election for active participation, which allows up to $25,000 of your rental losses to be deductible against all other types of income, including other passive income.
Rental losses are 'kept within the property' and only used to offset with rental income from the property in future years. When the property is sold, any carryover losses are released and will offset all other passive income.
There are two exceptions to this:
- If you have multiple rental properties, you can make an election to 'combine' them, which allows the rental profits and losses for all properties to be netted.
- If you actively participate in managing your rental property, then you can deduct up to $25,000 worth of rental losses from all income (passive and ordinary earned income). "Active participation" simply means that you are involved in making decisions about the property. You can even qualify if you use a management company, so it's a fairly common criteria that most rental property owners meet. You can edit your response about active participation within the rental property >> property profile or at the K-1 entry.
IRS Publication 527
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