Home-sale losses are not deductible though stock losses are

Evidence

Meanwhile, the tax treatment for home-sale losses has never changed, bound by Congress’s restrictive definitions on personal versus business or investment income and deductions. Income is considered income “from whatever source derived” and taxed (or not) accordingly, but losses are only deductible if they are connected to trade or business property or assets held for the production of income—like stock. Personal assets—like your personal residence—are not eligible for loss deductions, so if you sell your home at a loss, no deduction for you. — Dorothy A. Brown, The Whiteness of Wealth, 197

Meanwhile, the tax treatment for home-sale losses has never changed, bound by Congress’s restrictive definitions on personal versus business or investment income and deductions. Income is considered income “from whatever source derived” and taxed (or not) accordingly, but losses are only deductible if they are connected to trade or business property or assets held for the production of income—like stock. Personal assets—like your personal residence—are not eligible for loss deductions, so if you sell your home at a loss, no deduction for you. — Dorothy A. Brown, Getting to Reparations, 1253

Categorization

• DEFINE: Clarifies the tax-code asymmetry between personal residence losses (not deductible) and investment asset losses (deductible), which is the mechanism driving the racial impact.
• DEEPTHINKING: The asymmetric treatment of gains (tax-free if you profit) versus losses (non-deductible if you lose) is the exact mechanism of the saturated-system harm — a single rule that enriches gainers and never cushions losers, with a racial cast once Black homeowners were systematically pushed into losing markets.
• corroborated: 3 independent passages support this claim — Dorothy A. Brown, The Whiteness of Wealth: How the Tax…, 197; Dorothy A. Brown, Getting to Reparations: How Building a…, 1253