@M-MTax wrote:
I would also question the principal that it must be income-producing property to deduct a loss
Yet that was the advice in the memorandum from the IRS Office of Chief Counsel. MEMO
"Despite case law supporting possible deductions, IRS Chief Counsel Memorandum 1998-012 explains"
I acknowledge the existence of the memo, but as noted, case law creates precedent that other courts usually follow, and courts are more likely to follow prior case law than attorney opinions, unless the attorney opinion is so good that it convinces the new court that the old courts were all wrong (and convinces the appeals court that the lower court was not wrong to discard precedent.) This is possible, but uncommon.
