taken into account for purposes of subsections (b) and (d) 
of section 170 of the Internal Revenue Code of 1986. 
(b) TREATMENT OF EXCESS CONTRIBUTIONS.—For 
purposes of section 170 of such Code— 
(1) INDIVIDUALS.—In the case of an indi-
vidual— 
(A) LIMITATION.—Any qualified disaster 
contribution shall be allowed only to the extent 
that the aggregate of such contributions does 
not exceed the excess of the taxpayer’s con-
tribution base (as defined in paragraph (1) of 
section 170(b) of such Code) over the amount 
of all other charitable contributions allowed 
under such paragraph. 
(B) 
CARRYOVER.—If 
the 
aggregate 
amount of qualified disaster contributions made 
in the contribution year (within the meaning of 
section 170(d)(1) of such Code) exceeds the 
limitation of subparagraph (A), such excess 
shall be added to the excess described in the 
portion of subparagraph (A) of such section 
which precedes clause (i) thereof for purposes 
of applying such section. 
(2) CORPORATIONS.—In the case of a corpora-
tion—
(A) LIMITATION.—Any qualified disaster 
contribution shall be allowed only to the extent 
that the aggregate of such contributions does 
not exceed the excess of the taxpayer’s taxable 
income (as determined under paragraph (2) of 
section 170(b) of such Code) over the amount 
of all other charitable contributions allowed 
under such paragraph. 
(B) CARRYOVER.—Rules similar to the 
rules of paragraph (1)(B) shall apply for pur-
poses of this paragraph. 
(c) EXCEPTION
TO
OVERALL
LIMITATION
ON 
ITEMIZED DEDUCTIONS.—So much of any deduction al-
lowed under section 170 of such Code as does not exceed 
the qualified disaster contributions made during the tax-
able year shall not be treated as an itemized deduction 
for purposes of section 68 of such Code. 
(d) QUALIFIED
DISASTER
CONTRIBUTIONS.—For 
purposes of this section, the term ‘‘qualified disaster con-
tribution’’ means any charitable contribution (as defined 
in section 170(c) of such Code)— 
(1) made during the period beginning on Au-
gust 28, 2005, and ending on December 31, 2005, 
in cash to an organization described in section 
170(b)(1)(A) of such Code (other than an organiza-
tion described in section 509(a)(3) of such Code) for 
relief efforts related to Hurricane Katrina, and 
(2) with respect to which the taxpayer has 
elected the application of this section. 
In the case of a partnership or S corporation, the election 
under paragraph (2) shall be made separately by each 
partner or shareholder. 
SEC. 103. MILEAGE RATE FOR CHARITABLE PURPOSES RE-
LATED TO HURRICANE KATRINA. 
(a) MILEAGE RATE FOR CHARITABLE PURPOSES RE-
LATED TO HURRICANE KATRINA.—Notwithstanding sub-
section (i) of section 170 of the Internal Revenue Code 
of 1986, in the case of the use of a vehicle described in 
subsection (f)(12)(E)(i) of such section for provision of re-
lief related to Hurricane Katrina, the standard mileage 
rate for purposes of such section shall be 70 percent of 
the standard mileage rate for business purposes prescribed 
by the Secretary for purposes of chapter 1 of such Code 
which is in effect on the date of the contribution. 
(b) APPLICATION.—Subsection (a) shall apply only 
with respect to contributions made before January 1, 
2007.
SEC. 104. EXCLUSION OF CERTAIN CANCELLATIONS OF IN-
DEBTEDNESS. 
(a) IN GENERAL.—For purposes of the Internal Rev-
enue Code of 1986, gross income shall not include any 
amount which (but for this section) would be includible 
in gross income by reason of the discharge (in whole or 
in part) of qualified nonbusiness debt of a qualified indi-
vidual by an applicable entity (as defined in section 
6050P(c)). 
(b) QUALIFIED NONBUSINESS DEBT.—For purposes 
of this section, the term ‘‘qualified nonbusiness debt’’ 
means any indebtedness other than indebtedness incurred 
in connection with a trade or business. 
(c) QUALIFIED INDIVIDUAL.—For purposes of this 
section, the term ‘‘qualified individual’’ means any natural 
person who was a resident (as of August 28, 2005) of, 
or who owned real property (as of the date of such dis-
charge) in, any area which is determined by the President 
to warrant individual or individual and public assistance 
from the Federal Government under the Robert T. Staf-
ford Disaster Relief and Emergency Assistance Act by 
reason of Hurricane Katrina. 
(d) EXCEPTION FOR REAL PROPERTY OUTSIDE DIS-
ASTER AREA.—Subsection (a) shall not apply to any dis-
charge of indebtedness to the extent that real property