Congress has created special rules for what it calls "passive activities," a group that includes most investments in real estate and limited partnerships.
Basically losses from such investments can only be deducted against gains from similar activities. There's an exception that allows up to $25,000 of loss from rental real estate to be deducted if you are "actively" involved in the rental.
We don't know if Gingrich is actively involved in the rental in Wisconsin, but even if he was, he would not have been permitted to deduct the $4,646 loss he reported. The $25,000 allowance gradually disappears as adjusted gross income moves between $100,000 and $150,000. With AGI of $3,142,066, Gingrich is out of luck. (He can stockpile the disallowed loss and deduct it when he sells the property.) By the way, the Romneys' return shows that the passive-loss rule blocked the deduction of over $2 million in losses from limited partnerships.
Beware the Passive Loss Rule