Well, that’s the law in the Muck Now* circuit, and it might be to your clients’ advantage. What’s interesting is that in Calvin and other cases, one spouse wanted to use the other’s NOL, apparently thinking that it would save taxes. But in other cases, you wouldn’t want to lower the non-loser spouse’s taxable income down to the zero bracket. You would just want to use the losing spouse’s deduction to skim the cream off the top of the taxable income, and save some for next year. And if that’s the result, I would not be surprised if any given auditor on any given day might see the benefit of the strategy, and insist on the opposite result. After all, marriage today isn’t what it once was in 1959.
(*useful anagram for remembering 10th Circuit states)