Turbo Tax Question about NonResident State Return

[Chris Lounsbury]

Filing State portion of Tax Return currently. One property had a positive income of $3k.  I bought a second property and we did a bunch of rehab to it, so I had a loss of $12k.  When I put both of these into the schedule E, it says that my income is $3k.  It takes the loss and brings it to 0, before first reducing the income on the other property.  This leaves me with owing money for the nonresident state return.  Am I not understanding how passive income works on tax returns, or is Turbo Tax incorrectly decreasing my loss before adjusting my entire schedule E, not just the one property.  (It worked correctly when I filed the federal portion) Any advice will help!