Here’s the opinion I anticipated last year (see my blogpost “The “Goofy” Silt-Stir, 11/5/24), Gary M. Schwarz and Marlee Schwarz, T. C. Memo. 2025-122, filed 11/24/25. The Supremes’ disciplinary sortie in Loper Bright Entrs. caused Gary’s and Marlee’s trusty attorneys to reargue T. C. Memo. 2024-55, filed 5/13/24 (see my blogpost “The Buck Stops Here,” 5/13/24).

Said trusty attorneys, the National Foreign Trade Council, Inc., and the Chamber of Commerce of the United States of America all want Judge Goeke to invalidate (or maybe sustain) Reg. Sections 1.183-1(d)(1) and 1.183-2(b) as not being the best interpretation of Section 183 or having been promulgated in violation of the notice-and-comment provisions of the Administrative Procedures Act.

Tough luck, chaps, Judge Goeke says he don’t need no stinkin’ regulations (although he says so in much more polite terms). Section 183 limits Section 162 business deductions in nonbusiness contexts. Here the issue is offsetting real property appreciation gains with massive money-losing ecotourism (farming) operations.

Once again, Judge Goeke is in the weeds of TX real estate in Starr and Zapata counties, sorting out the value of cloudy waters in lakes and ponds, and dismembering the experts’ valuation opinions. He gives us exhaustive tables, and somber reasoning and copious citation of precedent going back a century, to figure out what an activity for profit means.  And what activities should be conjoined. Gary’s and Marlee’s ecotourism isn’t real estate. Real estate made serious money; ecotourism took heavy-duty losses. “No competent real estate activity would have conducted staggeringly unprofitable ecotourism for such nominal benefits.” T. C. Memo. 2025-122, at p. 35.

So those expecting the goofy regulation to collapse under the Supremes’ disciplinary scourge will have to remain unsatisfied.