[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2118 Introduced in Senate (IS)]

  2d Session
                                S. 2118

 To amend the Internal Revenue Code of 1986 to allow the casualty loss 
deduction for disaster losses without regard to the 10-percent adjusted 
                          gross income floor.


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                   IN THE SENATE OF THE UNITED STATES

                           September 25, 1996

  Mr. Faircloth (for himself and Mr. Helms) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

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                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow the casualty loss 
deduction for disaster losses without regard to the 10-percent adjusted 
                          gross income floor.

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

SECTION 1. ELIMINATION OF 10 PERCENT FLOOR FOR DISASTER LOSSES.

    (a) General Rule.--Subparagraph (A) of section 165(h)(2) of the 
Internal Revenue Code of 1986 (relating to net casualty loss allowed 
only to the extent it exceeds 10 percent of adjusted gross income) is 
amended by striking clauses (i) and (ii) and inserting the following:
                            ``(i) the amount of the personal casualty 
                        gains for the taxable year,
                            ``(ii) the amount of the federally declared 
                        disaster losses for the taxable year (or, if 
                        lesser, the net casualty loss), plus
                            ``(iii) the portion of the net casualty 
                        loss which is not deductible under clause (ii) 
                        but only to the extent such portion exceeds 10 
                        percent of the adjusted gross income of the 
                        individual.
                For purposes of the preceding sentence the term `net 
                casualty loss' means the excess of personal casualty 
                losses for the taxable year over personal casualty 
                gains.''
    (b) Federally Declared Disaster Loss Defined.--Paragraph (3) of 
section 165(h) of the Internal Revenue Code of 1986 (relating to 
treatment of casualty gains and losses) is amended by adding at the end 
the following:
                    ``(C) Federally declared disaster loss.--The term 
                `federally declared disaster loss' means any personal 
                casualty loss attributable to a disaster occurring in 
                an area subsequently determined by the President of the 
                United States to warrant assistance by the Federal 
                Government under the Disaster Relief and Emergency 
                Assistance Act.''
    (c) Clerical Amendment.--The heading for paragraph (2) of section 
165(h) of such Code is amended by striking ``Net casualty loss'' and 
inserting ``Net nondisaster casualty loss''.
    (d) Effective Date.--The amendments made by this section shall 
apply to losses attributable to disasters occurring on or after January 
1, 1996, including for purposes of determining the portion of such 
losses allowable in taxable years ending before such date pursuant to 
an election under section 165(i) of the Internal Revenue Code of 1986.
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