Wildfire Victim Tax Relief and Recovery Act

Bill: 119-s-496
Sponsor: full_name: Sen. Cruz, Ted [R-TX]
Introduced: 2025-02-10
Policy area: Taxation
Latest action: action_date: 2025-02-10
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2025-02-10
action_desc: Introduced in Senate
text: <p><strong>Wildfire Victim Tax Relief and Recovery Act</strong></p><p>This bill allows farmers to defer taxes on&nbsp;gain from the sale or exchange of livestock because of a fire. (Conditions apply.) The bill also allows individuals to exclude from gross income (for tax purposes) certain disaster relief payments received in connection with specific Texas wildfires.</p><p>Currently, farmers may defer gain on the sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes due to drought, flood, or other weather-related conditions for two years (four years if attributable to a federally-declared disaster). Otherwise, under current law, gain on the sale of livestock (including poultry) due to such weather-related conditions attributable to a federally-declared disaster may be deferred for one year. (Conditions apply.)</p><p>The bill adds fire to the list of circumstances for which the gain on the sale or exchange of livestock may be deferred, thus allowing farmers to defer such gains for up to four years (depending on the type of livestock and whether the sale is attributable to a federally-declared disaster).</p><p>The bill also allows individuals to exclude from gross income payments received from federal, state, or local government agencies or Xcel Energy (or any subsidiary, insurer, or agent of Xcel Energy) as compensation for unreimbursed losses, damages, and certain expenses attributable to the</p><ul><li>Smokehouse Creek, 687 Reamer, and Roughneck Fires (Hutchinson County, Texas, February and March 2024);</li><li>Windy Deuce Fire (Moore County, Texas, February 2024); and</li><li>Grape Vine Creek Fire (Gray County, Texas, February 2024).</li></ul>

tv_txt: II 119th CONGRESS 1st Session S. 496 IN THE SENATE OF THE UNITED STATES February 10, 2025 Mr. Cruz introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To exclude certain amounts relating to compensating victims of the Texas Panhandle fires, and for other purposes.

1. Short title This Act may be cited as the Wildfire Victim Tax Relief and Recovery Act . 2. Texas panhandle fire disaster relief payments (a) In general Texas Panhandle fire payments shall be treated as qualified disaster relief payments for purposes of section 139(b) of the Internal Revenue Code of 1986. (b) Texas panhandle fire payments For purposes of this section, the term Texas Panhandle fire payment means any amount received by or on behalf of an individual as compensation for loss, damages, expenses, loss in real property value, closing costs with respect to real property (including realtor commissions), or inconvenience (including access to real property) resulting from any Texas Panhandle fire if such amount was provided by— (1) a Federal, State, or local government agency, (2) Xcel Energy, or (3) any subsidiary, insurer, or agent of Xcel Energy or any related person. (c) Texas panhandle fire For purposes of this section, the term Texas Panhandle fire means any of the following wildfires: (1) The Smokehouse Creek Fire that ignited in Hutchinson County, Texas, on February 26, 2024. (2) The Windy Deuce Fire that ignited in Moore County, Texas, on February 26, 2024. (3) The Grape Vine Creek Fire that ignited in Gray County, Texas, on February 26, 2024. (4) The 687 Reamer Fire that ignited in Hutchinson County, Texas, on February 27, 2024. (5) The Roughneck Fire that ignited in Hutchinson County, Texas, on March 3, 2024. (d) Effective date This section shall apply to amounts received on or after February 26, 2024. 3. Involuntary conversions of livestock (a) Livestock sold on account of fire (1) In general Section 1033(e)(1) of the Internal Revenue Code of 1986 is amended by inserting fire, after flood, . (2) Extension of replacement period Section 1033(e)(2) of such Code is amended by inserting fire, after flood, . (3) Conforming amendment The heading for section 1033(e) of such Code is amended by inserting fire, after flood, . (b) Replacement of livestock with other property Section 1033(f) of the Internal Revenue Code of 1986 is amended by inserting fire, after flood, . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 4. Proceeds from livestock sold on account of fire (a) In general Section 451(g) of the Internal Revenue Code of 1986 is amended by inserting fire, after flood . (b) Conforming amendment The heading for section 451(g) of such Code is amended by inserting fire, after flood, . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023.