Under this ruling, would loss of a non-primary residence, therefore, be
>eligible for a loss on Schedule D? IOW, if they had not built a replacement
>house on the property and just sold the the remaining land, would they be
>able to claim the net difference as a capital loss because it is not a main >home?
For capital loss deductions, the issue isn't whether it's a "main home", but whether the purpose of the purchase is business or personal. For any sort of residence (other than something clearly intended as rental property), the purpose appears to be personal, hence losses are non-deductible.
Seth