II 

117TH CONGRESS 

1ST SESSION S. 3173 

To amend the Internal Revenue Code of 1986 to provide special rules for 

personal casualty losses arising from major disasters. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 4, 2021 

Mr. KENNEDY 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 

special rules for personal casualty losses arising from 

major disasters. 

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 ‘‘Claiming Losses After 

5 Disasters Act’’. 

6 SEC. 2. SPECIAL RULES FOR CASUALTY LOSSES ARISING 

7 FROM MAJOR DISASTERS. 

8 (a) TREATMENT OF LOSSES.— 


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1 (1) IN GENERAL.—Section 165(h) of the Inter2 nal Revenue Code of 1986 is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(6) SPECIAL RULE FOR QUALIFIED DISASTER

5 LOSSES.— 

6 ‘‘(A) IN GENERAL.—If an individual has a 

7 qualified net disaster loss for any taxable year, 

8 the amount determined under paragraph 

9 (2)(A)(ii) shall be the sum of— 

10 ‘‘(i) such net disaster loss, and 

11 ‘‘(ii) so much of the excess referred to 

12 in the matter preceding clause (i) of para13 graph (2)(A) (reduced by the amount in 

14 clause (i) of this subparagraph) as exceeds 

15 10 percent of the adjusted gross income of 

16 the individual. 

17 ‘‘(B) QUALIFIED NET DISASTER LOSS.— 

18 For purposes of subparagraph (A), the term 

19 ‘qualified net disaster loss’ means the excess of 

20 qualified disaster-related personal casualty 

21 losses over personal casualty gains. 

22 ‘‘(C) QUALIFIED DISASTER-RELATED PER23 SONAL CASUALTY LOSSES.— 

24 ‘‘(i) IN GENERAL.—For purposes of 

25 this subsection, the term ‘qualified disVerDate Sep 11 2014 21:28 Nov 05, 2021 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3173.IS S3173

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1 aster-related personal casualty losses’ 

2 means losses described in subsection (c)(3) 

3 (determined after application of paragraph 

4 (1)) which arise in a qualified disaster area 

5 on or after the first day of the incident pe6 riod of the qualified disaster to which such 

7 area relates, and which are attributable to 

8 such disaster. 

9 ‘‘(ii) QUALIFIED DISASTER AREA.— 

10 ‘‘(I) IN GENERAL.—The term 

11 ‘qualified disaster area’ means any 

12 area with respect to which a major 

13 disaster has been declared by the 

14 President under section 401 of the 

15 Robert T. Stafford Disaster Relief 

16 and Emergency Assistance Act if the 

17 incident period of the disaster with re18 spect to which such declaration is 

19 made begins after December 27, 

20 2020. 

21 ‘‘(II) EXCEPTION.—Such term 

22 shall not include any area which is a 

23 qualified disaster area as defined in 

24 section 301 of the Taxpayer Certainty 

25 and Disaster Tax Relief Act of 2020. 


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1 ‘‘(iii) QUALIFIED DISASTER.—The 

2 term ‘qualified disaster’ means, with re3 spect to any qualified disaster area, the 

4 disaster by reason of which a major dis5 aster was declared with respect to such 

6 area. 

7 ‘‘(iv) INCIDENT PERIOD.—For pur8 poses of this paragraph, the term ‘incident 

9 period’ means, with respect to any quali10 fied disaster, the period specified by the 

11 Federal Emergency Management Agency 

12 as the period during which such disaster 

13 occurred.’’. 

14 (2) CONFORMING AMENDMENT.—Section 

15 165(h)(5)(B)(ii) of such Code is amended by insert16 ing ‘‘or (6)’’ after ‘‘paragraph (2)(A)’’. 

17 (b) DOLLAR LIMITATION.—Section 165(h)(1) of the 

18 Internal Revenue Code of 1986 is amended by striking 

19 ‘‘$500 ($100 for taxable years beginning after December 

20 31, 2009)’’ and inserting ‘‘$100 ($500 in the case of any 

21 net disaster loss to which paragraph (3) applies)’’. 

22 (c) STANDARD DEDUCTION.— 

23 (1) IN GENERAL.—Section 63(c)(1) of the In24 ternal Revenue Code of 1986 is amended by striking 

25 ‘‘and’’ at the end of subparagraph (A), by striking 


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•S 3173 IS

1 the period at the end of subparagraph (B) and in2 serting ‘‘and’’, and by adding at the end the fol3 lowing new subparagraph: 

4 ‘‘(C) the disaster loss deduction.’’. 

5 (2) DISASTER LOSS DEDUCTION.—Section 63(c) 

6 of such Code is amended by adding at the end the 

7 following new paragraph: 

8 ‘‘(8) DISASTER LOSS DEDUCTION.—For the 

9 purposes of paragraph (1), the term ‘disaster loss 

10 deduction’ means the excess of qualified net disaster 

11 losses (as defined in section 165(h)(6)(B)) over the 

12 amount of personal casualty gains (as defined in sec13 tion 165(h)(3)(A)) reduced by any portion of such 

14 gains taken into account under section 

15 165(h)(5)(B)(i).’’. 

16 (d) TREATMENT UNDER ALTERNATIVE MINIMUM

17 TAX.—Section 56(b)(1)(D) of the Internal Revenue Code 

18 of 1986 is amended by inserting ‘‘(other than the disaster 

19 loss deduction)’’ after ‘‘section 63(c)’’. 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to losses incurred in taxable years 

22 beginning after December 31, 2019. 

Æ 


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