This bill changes the federal tax code to make it easier for owners of private timber land to deduct certain reforestation costs. It raises the existing small reforestation expense amounts from $10,000 to $30,000 and from $5,000 to $15,000 and adds an annual inflation adjustment for those amounts. It also creates a new tax rule that lets owners immediately deduct disaster-related reforestation expenses for standing (uncut) timber damaged by a Presidentially declared natural disaster. Under that new rule, a taxpayer may deduct up to $500,000 per qualified timber property ($250,000 for married individuals filing separately) and up to $1,000,000 in the aggregate ($500,000 for married filing separately). The rule requires an election to claim the deduction, includes definitions for terms like qualified timber property and qualified natural disaster, and sets coordination and allocation rules for controlled groups, partnerships, and S corporations. If the owner sells the timber property within 10 taxable years after claiming the deduction, the deduction can be recaptured as ordinary income under section 1245, with exceptions for casualty, condemnation, governmental taking, or the taxpayer's death. Most changes apply to amounts paid or incurred in taxable years beginning after December 31, 2026.
If you own or manage private timber land, the bill would allow larger immediate tax deductions for normal reforestation spending and for replanting after a Presidentially declared natural disaster. You must make a formal election to use the disaster-related deduction. If you sell the land or timber within 10 years after taking the disaster-related deduction, part or all of that deduction may have to be reported as ordinary income unless the sale falls under the listed exceptions.
No publicly available information on government budgetary cost estimates. The bill itself sets specific dollar limits for deductions: base expensing amounts increased to $30,000 and $15,000, and disaster-related deduction limits of $500,000 per property and $1,000,000 aggregate (with lower amounts for married taxpayers filing separately). The bill also includes inflation adjustments for those dollar amounts beginning after 2026.
No publicly available information on proponents' official statements included with this bill text.
No publicly available information on opponents' official statements included with this bill text.