> 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?
>
>No, because personal losses are not deductible.
>
>Depending on how it was lost, it may be a casualty loss - which could then
>make the sale a gain.
An interesting issue arises: Suppose a house is destroyed by a tornado (loss of value = $200,000, based on comparing prices of similar houses with empty lots). That's a $200,000 casualty loss, right?
Suppose the owner's income is sufficiently high that the casualty loss is entirely lost; it has no effect on his taxes.
The land + house that he originally bought for $300,000 is now land that he sold for $200,000. Does he really have a taxable gain of $100,000?
Seth