H.R. 1169 — Wildfire Victim Tax Relief and Recovery Act

Wildfire Victim Tax Relief and Recovery Act

This bill allows farmers to defer taxes on 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.

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.)

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).

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

Smokehouse Creek, 687 Reamer, and Roughneck Fires (Hutchinson County, Texas, February and March 2024);
Windy Deuce Fire (Moore County, Texas, February 2024); and
Grape Vine Creek Fire (Gray County, Texas, February 2024).

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1169 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 1169

  To exclude certain amounts relating to compensating victims of the 
             Texas Panhandle fires, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 10, 2025

Mr. Jackson of Texas introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To exclude certain amounts relating to compensating victims of the 
             Texas Panhandle fires, and for other purposes.

    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 ``Wildfire Victim Tax Relief and 
Recovery Act''.

SEC. 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.

SEC. 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 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.

SEC. 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.
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Wildfire Victim Tax Relief and Recovery Act

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