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@Mel7777 wrote:

Yes, I understand the disregarded entity.  However, as I report on Schedule E the loss is disallowed so even though he's in the business of renting properties, the loss needs to be deferred?

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Unless he qualifies as a Real Estate Professional (under the specific tax-definition) and also Materially Participates in the rentals, it is usually still passive and the losses would usually be suspended.

Short term rentals (average rental period of 30 days or less), or rentals where the tenants are provided "services" (such as maid service or meals) may be treated differently with different results.  If either of those apply, please give us details.