Other financial discussions

rather than 'arguments and opinions', the direction in the IRS pub 4345 is rather clear on the approach.

 

https://www.irs.gov/pub/irs-pdf/p4345.pdf

 

Loss-in-value of property
Property settlements for loss in value of property that are less than the adjusted basis of your property are
not taxable and generally do not need to be reported on your tax return.