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Line 22 of Schedule E says that if the result is a loss, you may have to fill out IRS Form 6198, At-Risk Limitations. The at-risk limitations apply to relatively few small-business owners, and they don't apply to losses from holding real estate placed in service before 1987 (except mineral property).
In a nutshell, if they apply, the at-risk rules limit your deductible losses to the amount that you have at risk and could actually lose from the activity.
A taxpayer is "at risk" to the extent of cash and the adjusted basis of property contributed to the business activity, as well as to the extent of loans on which he or she is personally liable or has provided collateral. Having insurance will not render you "not at risk" or cause you to have to fill out this form. A real estate lessor is "not at risk" to the extent that he or she is protected by non-recourse financing not secured by real estate, guarantees by others, stop-loss agreements or similar arrangements.
If any of these items apply to you and you are not at risk for some amounts in your rental activities, you may have to complete Form 6198. You can obtain a copy of this form and its instructions from the IRS by calling 1-800-TAX-FORM, or by downloading it from the IRS website at www.irs.gov.
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