Disaster Reforestation Act
Bill: H.R.4210 | Sponsor: Rep. Sewell, Terri A. (D-AL)
Policy area: Taxation

Summary:
Disaster Reforestation Act
This bill sets forth a special rule for the tax deduction for casualty losses of uncut timber (including pre-merchantable timber). It provides that in losses of any uncut timber from fire, storm, insects, invasive species, drought, or other casualty, or from theft, the basis for determining the amount of the deduction for such loss shall not be less than the excess of the value of such timber determined immediately before such loss was sustained, over the salvage value of such timber.
To be eligible for the casualty loss deduction, the uncut timber subject to the loss must be reforested not later than the close of the five-year period beginning on the date of the loss.

To amend the Internal Revenue Code of 1986 to provide a special rule 
              for certain casualty losses of uncut timber.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Disaster Reforestation Act''.

SEC. 2. CASUALTY LOSSES OF UNCUT TIMBER.

    (a) In General.--Section 165(b) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``For purposes of subsection (a)'' and 
        inserting the following:
            ``(1) In general.--For purposes of subsection (a)'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Special rule for casualty loss of uncut timber.--
                    ``(A) In general.--In the case of the loss of any 
                uncut timber from fire, storm, insects, invasive 
                species, drought, or other casualty, or from theft, the 
                basis for determining the amount of the deduction for 
                such loss (as otherwise determined under paragraph (1)) 
                shall not be less than the excess of--
                            ``(i) the value of such uncut timber 
                        determined immediately before such loss was 
                        sustained, over
                            ``(ii) the salvage value of such timber.
                    ``(B) Appraisal methods.--With respect to the 
                appraisal of a timber casualty loss described in 
                subparagraph (A)--
                            ``(i) the appraisal valuation date shall be 
                        not later than 1 year after the casualty loss; 
                        and
                            ``(ii) the appraisal shall--
                                    ``(I) conform to the Uniform 
                                Standards of Professional Appraisal 
                                Practice (USPAP);
                                    ``(II) be limited to the value of 
                                the lost timber; and
                                    ``(III) be completed by a Federal- 
                                or State-certified appraiser.
                    ``(C) Exclusion of timber not held for sale.--
                Subparagraph (A) shall not apply to any timber unless 
                such timber is held for the purpose of being cut and 
                sold in connection with a trade or business that is not 
                a passive activity within the meaning of section 469.
                    ``(D) Inclusion of pre-merchantable timber.--For 
                purposes of this paragraph, the term `uncut timber' 
                shall not fail to include pre-merchantable timber.
                    ``(E) Reforestation requirement.--Subparagraph (A) 
                shall not apply unless the uncut timber subject to the 
                loss is reforested (with hardwoods, softwoods, or any 
                combination thereof) by planting, seeding, or 
                appropriate site preparation, not later than the close 
                of the 5-year period beginning on the date of such 
                loss.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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