“To amend the Internal Revenue Code of 1986 to provide a special rule for certain casualty losses of uncut timber.”
No CRS summary available for this bill.
This section establishes a special rule under IRC §165(b) allowing the deduction for casualty loss (from fire, storm, other casualty, or theft) of uncut timber—including pre-merchantable timber held for cutting and sale in a non-passive trade or business—to be based on the excess of its appraised fair market value immediately before the loss over its salvage value (rather than adjusted basis). The appraisal must occur no later than one year after the loss, conform to Uniform Standards of Professional Appraisal Practice (USPAP), be limited to the lost timber's value, and be prepared by a federal- or state-certified appraiser; taxpayers unable to complete it by the tax return due date (including extensions) may elect to claim an estimate and file an amended return upon appraisal to adjust taxable income accordingly. The rule requires reforestation (via planting, seeding, or site preparation) within five years of the loss or recapture of the deduction benefit, and it defines "other casualty" to include losses from wood-destroying insects, invasive species, or severe drought. The amendments apply to losses sustained in taxable years beginning after enactment.