Driving for dollars can be an effective strategy the costs (gas, time, energy, materials) have to be added to the deal analysis. 

My lawyer is hoping to argue that against them but it seems like the most likely route is settlement, which means I'm paying thousands of dollars for nothing.

I believe in practice it does not actually offset the capital gains but reduces my taxable income dollar for dollar with the loss, as long as my Modified Adjusted Gross Income (MAGI) is under $150K.

EMD should only be a few thousand dollars.

driving for dollars, Google PPC

Go ask RJ Bates who has closed millions of dollars from the platform 

I am building a high-end home, so the dollars are bigger, etc. 

I would wager that if you haven't sat down and done a tax plan before, spending a few hundred dollars with a tax pro could save you tens of thousands in the long run. 

A few years ago their water bill suddenly shot up thousands of dollars more per month than historical norms.

After-tax dollars in your bank account are used for rent.