II 

117TH CONGRESS 

1ST SESSION S. 2768 

To amend the Internal Revenue Code of 1986 to provide a special rule 

for certain casualty losses of uncut timber. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 21, 2021 

Mr. CASSIDY (for himself and Mr. WARNOCK) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a special rule for certain casualty losses of uncut timber. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Disaster Reforestation 

5 Act’’. 

6 SEC. 2. CASUALTY LOSSES OF UNCUT TIMBER. 

7 (a) IN GENERAL.—Section 165(b) of the Internal 

8 Revenue Code of 1986 is amended— 

9 (1) by striking ‘‘For purposes of subsection 

10 (a)’’ and inserting the following: 


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1 ‘‘(1) IN GENERAL.—For purposes of subsection 

2 (a)’’, and 

3 (2) by adding at the end the following new 

4 paragraph: 

5 ‘‘(2) SPECIAL RULE FOR CASUALTY LOSS OF

6 UNCUT TIMBER.— 

7 ‘‘(A) IN GENERAL.—In the case of the loss 

8 of any uncut timber from fire, storm, or other 

9 casualty, or from theft, the basis for deter10 mining the amount of the deduction for such 

11 loss (as otherwise determined under paragraph 

12 (1)) shall not be less than the excess of— 

13 ‘‘(i) the appraised value of such uncut 

14 timber determined immediately before such 

15 loss was sustained, over 

16 ‘‘(ii) the salvage value of such timber. 

17 ‘‘(B) APPRAISAL METHODS.— 

18 ‘‘(i) IN GENERAL.—With respect to 

19 the appraisal of a timber casualty loss de20 scribed in subparagraph (A)— 

21 ‘‘(I) the appraisal valuation date 

22 shall be not later than 1 year after 

23 the casualty loss, and 

24 ‘‘(II) the appraisal shall— 


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1 ‘‘(aa) conform to the Uni2 form Standards of Professional 

3 Appraisal Practice (USPAP), 

4 ‘‘(bb) be limited to the value 

5 of the lost timber, and 

6 ‘‘(cc) be completed by a 

7 Federal- or State-certified ap8 praiser. 

9 ‘‘(ii) DELAY IN COMPLETION OF AP10 PRAISAL.— 

11 ‘‘(I) IN GENERAL.—In the case 

12 of any taxpayer who is unable to ob13 tain an appraisal described in clause 

14 (i) before the due date of the return 

15 of tax (including any extension of 

16 time for filing such return) for the 

17 taxable year in which the timber cas18 ualty loss occurred, the taxpayer may 

19 elect to— 

20 ‘‘(aa) with respect to the re21 turn of tax for such taxable year, 

22 include an estimate of the value 

23 of the uncut timber determined 

24 immediately before the loss was 

25 sustained, and 


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1 ‘‘(bb) upon completion of 

2 the appraisal within the period 

3 described in clause (i)(I), file an 

4 amended return for such taxable 

5 year with respect to any adjust6 ment in taxable income as deter7 mined pursuant to subclause (II). 

8 ‘‘(II) ADJUSTMENT OF TAXABLE

9 INCOME.—With respect to any tax10 payer who elects to provide an esti11 mate described in subclause (I)(aa) 

12 for any taxable year in which a timber 

13 casualty loss occurred, the taxable in14 come of the taxpayer for such taxable 

15 year shall be increased or decreased, 

16 as applicable, by an amount equal to 

17 the difference between— 

18 ‘‘(aa) the appraised value of 

19 such uncut timber determined 

20 immediately before such loss was 

21 sustained, as determined pursu22 ant to the appraisal described in 

23 clause (i), and 

24 ‘‘(bb) the estimate provided 

25 by the taxpayer under subclause 


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1 (I)(aa) with respect to such 

2 uncut timber. 

3 ‘‘(C) EXCLUSION OF TIMBER NOT HELD

4 FOR SALE.—Subparagraph (A) shall not apply 

5 to any timber unless such timber is held for the 

6 purpose of being cut and sold in connection 

7 with a trade or business that is not a passive 

8 activity within the meaning of section 469. 

9 ‘‘(D) INCLUSION OF PRE-MERCHANTABLE

10 TIMBER.—For purposes of this paragraph, the 

11 term ‘uncut timber’ shall not fail to include pre12 merchantable timber. 

13 ‘‘(E) REFORESTATION REQUIREMENT.— 

14 ‘‘(i) IN GENERAL.—Subparagraph (A) 

15 shall not apply unless the uncut timber 

16 subject to the loss is reforested (with hard17 woods, softwoods, or any combination 

18 thereof) by planting, seeding, or appro19 priate site preparation, not later than the 

20 close of the 5-year period beginning on the 

21 date of such loss. 

22 ‘‘(ii) RECAPTURE.—The Secretary 

23 shall, by regulations, provide for recap24 turing the benefit of any deduction allowed 

25 under this section with respect to any 


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1 uncut timber subject to loss to which sub2 paragraph (A) applied if the taxpayer fails 

3 to comply with clause (i) during the period 

4 provided under such clause. 

5 ‘‘(F) OTHER CASUALTIES.—For purposes 

6 of subparagraph (A), the term ‘other casualty’ 

7 shall include loss of any uncut timber from— 

8 ‘‘(i) wood-destroying insects, 

9 ‘‘(ii) wood-destroying invasive species, 

10 or 

11 ‘‘(iii) severe drought.’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to losses sustained in taxable years 

14 beginning after the date of the enactment of this Act. 

Æ 


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