Unfortunately - escrow income is not connected in any way to the rental activity and should be reported as income separately.
Rental losses may reduce your other income if they are within general rental losses limitations.
Rental is considered a passive activity and as such - the passive activity rules limit rental losses by $25,000 ($12,500 if you are using married filing separate filing status)
If you have modified Adjusted Gross Income (MAGI) is above $100,000, the loss limit decreases by $.5 for every dollar over $100,000 and phased out if your MAGI is above $150,000.
You may need to complete Form 8582: Passive Activity Loss Limitations .
The passive activity rules don't apply to real estate activities for many properties owned and managed by real estate professionals.
See also - IRS Publication 527: Residential Rental Property.
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