irasmilo writes (in part):

Had she actually rented the property (perhaps even if she made a bona fide attempt to rent it), she might have been able to deduct the loss. But, in the absence of clear evidence that this property was used for business or rental purposes, there's no deduction.

I reply:

Is it too late? According to the original poster, the property is on the market but "no nibbles." The original poster predicts a hefty loss when it is eventually sold, but for now that's merely a prediction. So if his daughter takes the property off the market and makes a bona fide attempt to rent it, does the analysis change? 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. --Bob