Amendment to H.R. 5366 - Doug LaMalfa Federal Disaster Tax Relief Certainty Act
Summary
Representative Smith of Missouri introduced an amendment in the nature of a substitute to H.R. 5366, proposing the 'Doug LaMalfa Federal Disaster Tax Relief Certainty Act,' which would amend the Internal Revenue Code to provide special rules for casualty losses in qualified disaster areas and exclude from gross income compensation received for losses from certain wildfires. The amendment would raise the casualty loss deduction floor to $100 (from $500) for qualified disaster-related losses and create new Section 139M excluding qualified wildfire relief payments from taxable income. The bill would apply to taxable years beginning after December 31, 2024, and to payments received in taxable years beginning after December 31, 2025, covering disasters with incident periods from December 28, 2019 through January 1, 2027.
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What changed
The amendment proposes two significant changes to the Internal Revenue Code. First, it adds a special rule under Section 165(h)(6) allowing individuals with qualified net disaster losses to claim casualty loss deductions without the 10% of adjusted gross income threshold, subject only to a $100 floor, effectively lowering the threshold for disaster-related personal casualty losses. Second, the amendment creates new Section 139M excluding from gross income qualified wildfire relief payments received as compensation for losses, expenses, or damages from federally declared wildfires occurring between December 31, 2014 and January 1, 2027.
Taxpayers in federally declared disaster areas and those receiving wildfire relief payments would benefit from expanded deductions and exclusions. Individuals claiming excluded wildfire relief payments under Section 139M would be barred from double-dipping by claiming deductions or credits for the same expenditures, and no basis increase would result from excluded payments. The amendment supersedes prior coordination rules under the Taxpayer Certainty and Disaster Tax Relief Act of 2020 for taxable years beginning after December 31, 2024.
Archived snapshot
Apr 27, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
N S AMENDMENT IN THEOATURE OF A GUBSTITUTE H.R. 5366 TO M. S M FFERED BYRMITH OF ISSOURI
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE. 1
This Act may be cited as the ''Doug LaMalfa Federal 2 Disaster Tax Relief Certainty Act''. 3
SEC. 2. CODIFICATION AND EXTENSION OF RULES FOR 4 CASUALTY LOSSES ARISING FROM MAJOR 5 DISASTERS. 6
(a) I .--Section 165(h) of the Internal 7 N ENERAL Revenue Code of 1986 is amended by adding at the end 8 the following new paragraph: 9 ''(6) S -10 PECIAL RULE FOR QUALIFIED NET DIS .-- 11ASTER LOSSES ''(A) I .--If an individual has a 12 N GENERAL qualified net disaster loss for any taxable year, 13 the amount determined under paragraph 14 (2)(A)(ii) shall be the sum of-- 15 ''(i) such qualified net disaster loss, 16 and 17
''(ii) so much of the excess referred to 1 in the matter preceding clause (i) of para-2 graph (2)(A) (reduced by the amount in 3 clause (i) of this subparagraph) as exceeds 4 10 percent of the adjusted gross income of 5 the individual. 6 ''(B) Q .-- 7UALIFIED NET DISASTER LOSS For purposes of subparagraph (A), the term 8 'qualified net disaster loss' means the excess (if 9 any) of-- 10 ''(i) qualified disaster-related personal 11 casualty losses, over 12 ''(ii) personal casualty gains reduced 13 by the portion of such gains taken into ac-14 count under paragraph (5)(B)(i). 15 ''(C) Q - -16UALIFIED DISASTER RELATED PER .--For purposes of 17SONAL CASUALTY LOSSES this paragraph-- 18 ''(i) I .--The term 'quali-19 N GENERAL fied disaster-related personal casualty 20 losses' means losses described in subsection 21 (c)(3) (determined after application of 22 paragraph (1)) which arise in a qualified 23 disaster area on or after the first day of 24 the incident period of the qualified disaster 25
to which such area relates, and which are 1 attributable to such disaster. 2 ''(ii) Q .-- 3 UALIFIED DISASTER AREA The term 'qualified disaster area' means 4 any area with respect to which a major 5 disaster has been declared by the President 6 under section 401 of the Robert T. Staf-7 ford Disaster Relief and Emergency Assist-8 ance Act if the incident period of the dis-9 aster with respect to which such declara-10 tion is made begins on or after December 11 28, 2019, and before January 1, 2027. 12 ''(iii) Q .--The 13 UALIFIED DISASTER term 'qualified disaster' means, with re-14 spect to any qualified disaster area, the 15 disaster by reason of which a major dis-16 aster was declared with respect to such 17 area. 18 ''(iv) I .--The term 19 NCIDENT PERIOD 'incident period' means, with respect to 20 any qualified disaster, the period specified 21 by the Federal Emergency Management 22 Agency as the period during which such 23 disaster occurred.''. 24
(b) D .--Section 165(h)(1) of such 1 OLLAR IMITATION Code is amended by striking ''$500 ($100 for taxable 2 years beginning after December 31, 2009)'' and inserting 3 ''$100 ($500 in the case of any qualified disaster-related 4 personal casualty losses (as defined in paragraph (6)(C))''. 5 (c) D A I W D 6 NEDUCTION ELLOWED TO INDIVIDUALS LHO O D .--Section 63(b) of 7OTLECT TO TEMIZE EDUCTIONS such Code is amended-- 8 (1) by striking ''and'' at the end of paragraph 9 (6) and inserting a comma, 10 (2) by striking the period at the end of para-11 graph (7) and inserting '', and'', and 12 (3) by adding at the end the following new 13 paragraph: 14 ''(8) so much of the deduction allowed by sec-15 tion 165(a) as is attributable to the qualified net 16 disaster loss (as defined in section 165(h)(6)(B)).''. 17 (d) E D .-- 18 FFECTIVE ATE (1) I .--The amendments made by 19 N GENERAL this section shall apply to taxable years beginning 20 after December 31, 2024. 21 (2) C -22 OORDINATION WITH SUPERCEDED PROVI .--Section 304(b) of the Taxpayer Certainty 23SIONS and Disaster Tax Relief Act of 2020 (division EE of 24 Public Law 116-260) and section 70438 of Public 25
Law 119-21 shall not apply to any taxable year be-1 ginning after December 31, 2024. 2
SEC. 3. CODIFICATION AND EXTENSION OF EXCLUSION 3 FROM GROSS INCOME OF COMPENSATION 4 FOR LOSSES OR DAMAGES RESULTING FROM 5 CERTAIN WILDFIRES. 6
(a) I .--Part III of subchapter B of chap-7 N ENERAL ter 1 of the Internal Revenue Code of 1986 is amended 8 by inserting before section 140 the following new section: 9
''SEC. 139M. COMPENSATION FOR LOSSES OR DAMAGES RE-10 SULTING FROM CERTAIN WILDFIRES. 11
''(a) I .--Gross income shall not include 12 N ENERAL any amount received by an individual as a qualified wild-13 fire relief payment. 14 ''(b) Q P .--For 15 GUALIFIED GILDFIRE WELIEF RAYMENT purposes of this section-- 16 ''(1) I .--The term 'qualified wildfire 17 N GENERAL relief payment' means any amount received by or on 18 behalf of an individual as compensation for losses, 19 expenses, or damages (including compensation for 20 additional living expenses, lost wages (other than 21 compensation for lost wages paid by the employer 22 which would have otherwise paid such wages), per-23 sonal injury, death, or emotional distress) incurred 24 as a result of a qualified wildfire disaster, but only 25
to the extent the losses, expenses, or damages com-1 pensated by such payment are not compensated for 2 by insurance or otherwise. 3 ''(2) Q .--The 4 UALIFIED WILDFIRE DISASTER term 'qualified wildfire disaster' means any Feder-5 ally declared disaster (as defined in section 6 165(i)(5)(A)) declared after December 31, 2014, 7 and before January 1, 2027, as a result of any for-8 est or range fire. 9 ''(c) D .--Notwith-10 AENIAL OF DOUBLE BENEFIT standing any other provision of this title-- 11 ''(1) no deduction or credit shall be allowed (to 12 the individual for whose benefit a qualified wildfire 13 relief payment is made) for, or by reason of, any ex-14 penditure to the extent of the amount excluded 15 under this section with respect to such expenditure, 16 and 17 ''(2) no increase in the basis or adjusted basis 18 of any property shall result from any amount ex-19 cluded under this section with respect to such prop-20 erty.''. 21 (b) C .--The table of sections 22 LERICAL MENDMENT for part III of subchapter B of chapter 1 of such Code 23 is amended by inserting before the item related to section 24 140 the following new item: 25
''Sec. 139M. Compensation for losses or damages resulting from certain wildfires.''.
(c) E D .--The amendments made by 1 FFECTIVE ATE this section shall apply to payments received in taxable 2 years beginning after December 31, 2025. 3
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