I 
109TH CONGRESS 
1ST SESSION H. R. 3883 
To amend the Internal Revenue Code of 1986 to allow a deduction for 
qualified timber gains. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 22, 2005 
Mr. MCCRERY (for himself, Mr. HERGER, Mr. SAM JOHNSON of Texas, Mr. 
ENGLISH of Pennsylvania, Mr. LEWIS of Kentucky, Mr. BRADY of Texas, 
Mr. CANTOR, Mr. BAIRD, Mr. DICKS, Mr. GOHMERT, Mr. GOODLATTE, 
Mr. HASTINGS of Washington, Mr. JINDAL, Mr. LARSEN of Washington, 
Mr. REICHERT, Mr. ROSS, Mr. SMITH of Washington, Mr. WALDEN of 
Oregon, Mr. BOUSTANY, and Mr. HALL) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
deduction for qualified timber gains. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Timber Tax Act of 
2005’’. 
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SEC. 2. DEDUCTION FOR QUALIFIED TIMBER GAIN. 
(a) IN GENERAL.—Part I of subchapter P of chapter 
1 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section: 
‘‘SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN. 
‘‘(a) IN GENERAL.—In the case of a taxpayer which 
elects the application of this section for a taxable year, 
there shall be allowed a deduction against gross income 
equal to 60 percent of the lesser of— 
‘‘(1) the taxpayer’s qualified timber gain for 
such year, or 
‘‘(2) the taxpayer’s net capital gain for such 
year. 
‘‘(b) QUALIFIED TIMBER GAIN.—For purposes of 
this section, the term ‘qualified timber gain’ means, with 
respect to any taxpayer for any taxable year, the excess 
(if any) of— 
‘‘(1) the sum of the taxpayer’s gains described 
in subsections (a) and (b) of section 631 for such 
year, over 
‘‘(2) the sum of the taxpayer’s losses described 
in such subsections for such year. 
‘‘(c) SPECIAL RULES FOR PASS-THRU ENTITIES.— 
In the case of any qualified timber gain of a pass-thru 
entity (as defined in section 1(h)(10)), the election under 
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this section shall be made separately by each taxpayer sub-
ject to tax on such gain.’’. 
(b) COORDINATION WITH MAXIMUM CAPITAL GAINS 
RATES.— 
(1) 
TAXPAYERS
OTHER
THAN
CORPORA-
TIONS.—Paragraph (2) of section 1(h) of the Inter-
nal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(2) REDUCTION OF NET CAPITAL GAIN.—For 
purposes of this subsection, the net capital gain for 
any taxable year shall be reduced (but not below 
zero) by the sum of— 
‘‘(A) the amount which the taxpayer takes 
into account as investment income under sec-
tion 163(d)(4)(B)(iii), and 
‘‘(B) the lesser of— 
‘‘(i) the amount described in para-
graph (1) of section 1203(a), or 
‘‘(ii) the amount described in para-
graph (2) of such section.’’. 
(2) CORPORATIONS.—Section 1201 of such 
Code is amended by redesignating subsection (b) as 
subsection (c) and inserting after subsection (a) the 
following new subsection: 
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