As long as your income is $100,000.00 or less per year you can claim a loss on rental property as a deduction.
What the tax code says is an individual may deduct up to $25,000 of real estate loss per year as long as you earn $100,000.00 or less.
You cannot deduct more than $25,000.00 per year but as long as it's $25,000.00 or less per year you can deduct it from your income taxes.
The ability to claim a loss on rental property is a special tax rule that lets you deduct up to the $25,000.00 per year from real estate rental property that you actively participate in.
Rental income is considered passive income and passive activity income is not deductible against non-passive income, such as wages.
But you can deduct the loss on rental property separately.