How HR 5366 changes current law

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

The bill codifies and extends tax relief provisions for casualty losses due to major disasters and for exclusion of compensation for wildfire-related losses.

• Section 165(h)

  Special rule for qualified net disaster losses.-- 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.

  This creates a new rule for calculating deductions for qualified net disaster losses.

• Section 165(h)(1)

  $500 ($100 for taxable years beginning after December 31, 2009) → $100 ($500 in the case of any qualified disaster-related personal casualty losses (as defined in paragraph (6)(C)))

  This increases the dollar limitation for deductions on qualified disaster-related personal casualty losses.

• Section 63(b)

  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)).

  This allows a deduction for qualified net disaster losses for individuals who do not itemize deductions.

• Section 139M

  Gross income shall not include any amount received by an individual as a qualified wildfire relief payment.

  This establishes a new exclusion from gross income for payments received as compensation for wildfire losses.

• Section 139M

  The term `qualified wildfire relief payment' means any amount received by or on behalf of an individual as compensation for losses, expenses, or damages... 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.

  This defines what constitutes a qualified wildfire relief payment.

• Section 139M

  no deduction or credit shall be allowed (to the individual for whose benefit a qualified wildfire relief payment is made) for... any expenditure to the extent of the amount excluded under this section with respect to such expenditure.

  This prevents double benefits by disallowing deductions for amounts compensated by wildfire relief payments.

• Section 139M

  The term `qualified wildfire disaster' means any Federally declared disaster... declared after December 31, 2014, and before January 1, 2027, as a result of any forest or range fire.

  This establishes the time frame for what qualifies as a wildfire disaster eligible for relief.