How HR 176 changes current law

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill establishes tax deductions for attorney fees related to wildfire damage awards and excludes certain settlement funds from gross income.

• Section 62(a)

  (22) Attorney fees and court costs relating to awards with respect to certain wildfires.--(A) In general.--Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any award with respect to a qualifying wildfire disaster. The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim. (B) Qualifying wildfire disaster.--For purposes of subparagraph (A), the term `qualifying wildfire disaster' means any forest or range fire that--(i) is a federally declared disaster (as such term is defined in section 165(i)(5)(A)), (ii) occurs in a disaster area (as such term is defined in section 165(i)(5)(B)), and (iii) occurs in calendar year 2015 or later.

  This creates a new deduction for attorney fees associated with certain wildfire damages.

• Part III of subchapter B of chapter 1

  SEC. 139J. CERTAIN WILDFIRE SETTLEMENT PROCEEDS. (a) In General.--Gross income shall not include amounts paid by a qualified settlement fund established to compensate victims for losses or damages in connection with a qualifying wildfire disaster (as defined in section 62(a)(22)(B)). (b) Qualified Settlement Fund.--The term `qualified settlement fund' has the meaning given such term in Section 1.468B-1 of title 26, Code of Federal Regulations.

  This establishes a new section excluding certain wildfire settlement proceeds from gross income.

• Clerical Amendment

  Sec. 139J. Certain wildfire settlement proceeds.

  This adds a new item to the table of sections for greater clarity regarding wildfire settlement proceeds.