Which type of property losses are generally deductible?

Deductibility of property losses hinges on the nature of the property and its use in the taxpayer's portfolio. Investment property losses, which are associated with property held to generate income, are generally deductible against income generated from similar activities. This means that if an investment property decreases in value or incurs expenses that exceed income, the loss can typically be subtracted from other income to lower overall taxable income.

In contrast, personal use property losses are generally not deductible. This includes losses related to personal residences and personal-use vehicles. Furthermore, while all property losses may seem to imply potential deductibility, the tax code only allows specific types of losses related to business and investment activities as deductions. Therefore, it is the investment property losses that fit the criteria for deductibility, making this choice the most accurate. Business-related losses also qualify for deduction, but the question specifies a broader category of property losses which specifically includes investment properties.