You can have a loss (or add to one) to the extent that the items being deducted would be deductible elsewhere on the tax return.  Translation:  If you're filing Sch A and haven't hit the $10K SALT cap you can deduce mortgage interest and real estate taxes on the 8829 in the "top" section (above line 15).  If you're not itemizing, then those expenses should be reported in the "bottom" section (between 15 and 27) so they are not allowed to create a loss.  And (for the first time since TCJA) I had one this year where doing the "line 11" worksheet in the instructions actually split the RE tax between the top and bottom sections (resulting in a net zero Sch C).