tax deductions on rental property

[Edward Barnes]

My wife owns a condo about in 2008. I married into this pig (the condo, not my wife) as we filed jointly last year. It loses about $500/mo after everything's said and done. Doing the taxes last year it wouldn't let me declare a loss on the property as it was considered "passive income" because I have a property manager and don't actively manage the property myself. Is this correct? If so, my property manager's costing me more than 10% of rent.