H.R. 5366

119 HR 5366 EH: Doug LaMalfa Federal Disaster Tax Relief Certainty Act
 U.S. House of Representatives
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 IB
 119th CONGRESS  2d Session
 H. R. 5366
 IN THE HOUSE OF REPRESENTATIVES
 AN ACT
To amend the Internal Revenue Code of 1986 to codify and extend the rules for personal casualty losses arising from major disasters and the rules for the exclusion from gross income of compensation for losses or damages resulting from certain wildfires.
1.
Short title
This Act may be cited as the   Doug LaMalfa Federal Disaster Tax Relief Certainty Act  .
2.
Codification and extension of rules for casualty losses arising from major disasters
(a)
In general
 Section 165(h)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
(6)
Special rule for qualified net disaster losses
(A)
In general
If an individual has a qualified net disaster loss for any taxable year, the amount determined under paragraph (2)(A)(ii) shall be the sum of—
(i)
such qualified net disaster loss, and
(ii)
so much of the excess referred to in the matter preceding clause (i) of paragraph (2)(A) (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual.
(B)
Qualified net disaster loss
For purposes of subparagraph (A), the term  qualified net disaster loss  means the excess (if any) of—
(i)
qualified disaster-related personal casualty losses, over
(ii)
personal casualty gains reduced by the portion of such gains taken into account under paragraph (5)(B)(i).
(C)
Qualified disaster-related personal casualty losses
For purposes of this paragraph—
(i)
In general
The term  qualified disaster-related personal casualty losses  means losses described in subsection (c)(3) (determined after application of paragraph (1)) which arise in a qualified disaster area on or after the first day of the incident period of the qualified disaster to which such area relates, and which are attributable to such disaster.
(ii)
Qualified disaster area
The term  qualified disaster area  means any area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act if the incident period of the disaster with respect to which such declaration is made begins on or after December 28, 2019, and before January 1, 2027.
(iii)
Qualified disaster
The term  qualified disaster  means, with respect to any qualified disaster area, the disaster by reason of which a major disaster was declared with respect to such area.
(iv)
Incident period
The term  incident period  means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred.
 .
(b)
Dollar limitation
Section 165(h)(1) of such Code is amended by striking  $500 ($100 for taxable years beginning after December 31, 2009)  and inserting  $100 ($500 in the case of any qualified disaster-related personal casualty losses (as defined in paragraph (6)(C)) .
(c)
Deduction allowed to individuals who do not elect to itemize deductions
Section 63(b) of such Code is amended—
(1)
by striking  and  at the end of paragraph (6) and inserting a comma,
(2)
by striking the period at the end of paragraph (7) and inserting  , and , and
(3)
by adding at the end the following new paragraph:
(8)
so much of the deduction allowed by section 165(a) as is attributable to the qualified net disaster loss (as defined in section 165(h)(6)(B)).
 .
(d)
Effective date
(1)
In general
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
(2)
Coordination with superceded provisions
Section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (division EE of  Public Law 116–260 ) and section 70438 of  Public Law 119–21  shall not apply to any taxable year beginning after December 31, 2024.
3.
Codification and extension of exclusion from gross income of compensation for losses or damages resulting from certain wildfires
(a)
In general
Part III of subchapter B of  chapter 1  of the Internal Revenue Code of 1986 is amended by inserting before section 140 the following new section:
139M.
Compensation for losses or damages resulting from certain wildfires
(a)
In general
Gross income shall not include any amount received by an individual as a qualified wildfire relief payment.
(b)
Qualified wildfire relief payment
For purposes of this section—
(1)
In general
The term  qualified wildfire relief payment  means any amount received by or on behalf of an individual as compensation for losses, expenses, or damages (including compensation for additional living expenses, lost wages (other than compensation for lost wages paid by the employer which would have otherwise paid such wages), personal injury, death, or emotional distress) incurred as a result of a qualified wildfire disaster, but only to the extent the losses, expenses, or damages compensated by such payment are not compensated for by insurance or otherwise.
(2)
Qualified wildfire disaster
The term  qualified wildfire disaster  means any Federally declared disaster (as defined in section 165(i)(5)(A)) declared after December 31, 2014, and before January 1, 2027, as a result of any forest or range fire.
(c)
Denial of double benefit
Notwithstanding any other provision of this title—
(1)
no deduction or credit shall be allowed (to the individual for whose benefit a qualified wildfire relief payment is made) for, or by reason of, any expenditure to the extent of the amount excluded under this section with respect to such expenditure, and
(2)
no increase in the basis or adjusted basis of any property shall result from any amount excluded under this section with respect to such property.
 .
(b)
Clerical amendment
The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting before the item related to section 140 the following new item:
Sec. 139M. Compensation for losses or damages resulting from certain wildfires.
  .
(c)
Effective date
The amendments made by this section shall apply to payments received in taxable years beginning after December 31, 2025.
     Passed the House of Representatives April 27, 2026.  Kevin F. McCumber,  Clerk.