Because the difference between being able to claim a $60,000 loss and not being able to claim it may be worth some economic risk.

Staying away from the point of your post, because it gets beyond my comfort level in such things as intent, substance, etc., I'll just point out that there's no $60,000 nondeductible loss in any case, IIRC. That number wasn't a tax number and included such things as mortgage payments, the bulk of which will be deductible as interest regardless.

I agree with Phil. The issues of intent and substance are beyond my comfort level as well. I only raised them because I'm sure there are aggressive tax advisors who would take the position that you could make these losses deductible. I have no idea whether they could prevail.

Ira