The rental losses would not be eligible to offset your other income(Ordinary income or portfolio income).

That puts pressure on most ordinary people.

Part III #1 line has zero ordinary income and #2 line has negative net rental real estate income. 

Any 'ordinary and necessary expenses' you'll be able to deduct at tax time and these include regular maintenance, supplies for upkeep, insurance, taxes, utilities, etc.  

It's a bit more expensive than Type M, what's normally used in ordinary residential plumbing. 

So, now you have rental income that you are taxed at your ordinary rate, and passive deductions with no rental income to offset (other than your other unit that is rented).This is one of the reasons why its not advisable to own a property under a LLC that you live in.Consult a qualified professional. 

we bought one for 7.2 million that the family owned for ever.. they just paid their cap gains.I would think but of course you probably have this figured but if your creating lots for inventory and selling to the public thats Ordinary income not cap gains  .. but as U point out if your in the business your depreciation will help substantially.

At this point you can't offset passive real estate losses with other types of income(ordinary / portfolio).However, she likely is not paying tax on her real estate cash-flow which makes real estate a better alternative to stocks / bonds from an after-tax perspective.

For example, its easy to look back at 2008 and say that "oh I knew that would happen" yet in the moment millions of people had no clue a crash was coming and not just ordinary people but huge financial industries as well.

. $50k is taxed as capital gain, while $40k is deducted as an ordinary loss, at a higher rate usually.