Ordinary vs Capital Losses

[Steve Sanderson]

I'm currently reading The Book on Tax Strategies for the Savvy Real Estate Investor and reached the section about real estate losses. They mention that real estate losses are often times mistaken as a capital loss. In reality they are considered to be an ordinary loss and can be used to offset W-2 income. Am I understanding that correctly? I had always assumed that real estate losses could only be used to offset passive income (current and/or future) and could NOT offset W-2 income. Anyone have any input on this?