[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8538 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 8538
To amend the Internal Revenue Code of 1986 to allow for limited full
expensing of certain reforestation expenditures.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 28, 2026
Mr. Carter of Georgia (for himself, Ms. Sewell, Mr. Bean of Florida,
Mr. Thompson of California, Mr. Steube, Mr. Murphy, and Mr. Moran)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow for limited full
expensing of certain reforestation expenditures.
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 ``Save America's Family Forests Act of
2026''.
SEC. 2. MODIFICATION OF REFORESTATION EXPENDITURE RULES.
(a) Increase in Base Expensing Amount.--Section 194(b)(1)(B) of the
Internal Revenue Code of 1986 is amended--
(1) in clause (i), by striking ``$10,000'' and inserting
``$30,000'', and
(2) in clause (ii), by striking ``$5,000'' and inserting
``$15,000''.
(b) Inflation Adjustment for Base Expensing.--Section 194(b)(1) of
such Code is amended by adding at the end the following new
subparagraph:
``(C) Inflation adjustment.--
``(i) In general.--In the case of any
taxable year beginning after 2026, each dollar
amount in subparagraph (B) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2025' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
``(ii) Rounding.--If any increase
determined under clause (i) is not a multiple
of $100, such increase shall be rounded to the
nearest multiple of $100.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2026.
SEC. 3. TREATMENT OF REFORESTATION EXPENDITURES FOR QUALIFIED NATURAL
DISASTERS.
(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
of the Internal Revenue Code of 1986 is amended by inserting after
section 194A the following new section:
``SEC. 194B. TREATMENT OF REFORESTATION EXPENDITURES FOR QUALIFIED
NATURAL DISASTERS.
``(a) In General.--
``(1) In general.--In the case of any qualified timber
property with respect to which the taxpayer has made an
election under this section, there shall be allowed a deduction
for the taxable year in an amount equal to the lesser of--
``(A) so much of the disaster-related reforestation
expenditures paid or incurred by the taxpayer during
such taxable year with respect to each qualified timber
property of the taxpayer as does not exceed $500,000
($250,000 in the case of a married taxpayer filing
separately) with respect to any such property, or
``(B) $1,000,000 ($500,000 in the case of a married
taxpayer filing separately), in the aggregate for all
qualified timber properties with respect to disaster
related-reforestation expenditures.
``(2) Election.--An election under this section shall be
made at such time and in such manner as the Secretary may
prescribe, including on an amended return.
``(3) Determination of marital status.--For purposes of
this section, marital status shall be determined under section
7703(a).
``(4) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2026, each of the dollar amounts in
paragraph (1) shall be increased by an amount equal
to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2025'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``(B) Rounding.--If any increase under subparagraph
(A) is not a multiple of $100, such increase shall be
rounded to the nearest multiple of $100.
``(5) Controlled groups.--
``(A) In general.--In the case of a controlled
group of corporations or trades or businesses under
common control, the limitations of paragraph (1) shall
be allocated among the members of such group in
accordance with regulations prescribed by the
Secretary.
``(B) Definition.--For purposes of subparagraph
(A), the term `controlled group' has the meaning given
to the term controlled group of corporations in section
1563(a), except that section 1563(a)(1) shall be
applied by substituting `more than 50 percent' for `at
least 80 percent' in each instance.
``(C) Pass thru entity.--In the case of a
partnership or S corporation, the aggregate amount
described in paragraph (1)(B) shall be applied at the
partnership or S corporation level, respectively.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Disaster-related reforestation expenditures.--
``(A) In general.--The term `disaster-related
reforestation expenditures' means reforestation
expenditures paid or incurred in connection with uncut
timber that was damaged or destroyed as a direct result
of a qualified natural disaster which occurred during
the 5-year period ending on the date on which such
reforestation occurs, determined without regard--
``(i) to any expenditure with respect to
which the taxpayer has received reimbursement
under any governmental reforestation cost-
sharing program unless the amounts so
reimbursed have been included in the gross
income of the taxpayer, and
``(ii) any expenditures with respect to
which a deduction is allowed under section
194(a).
``(B) Qualified timber property; reforestation
expenditures; cost-sharing programs.--The terms
`qualified timber property', `reforestation
expenditures', and `cost-sharing programs' have the
meanings given such terms in section 194(c).
``(C) Uncut timber.--The term `uncut timber' means,
with respect to a qualified natural disaster, standing
timber that had not been harvested, severed, or
otherwise cut before such qualified natural disaster
occurred.
``(D) Qualified natural disaster.--The term
`qualified natural disaster' means any disaster
determined by the President under section 401 of the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act.
``(2) Treatment of trusts and estates.--The aggregate
amount of disaster-related reforestation expenditures incurred
by any trust or estate shall be apportioned between the income
beneficiaries and the fiduciary under regulations prescribed by
the Secretary.
``(3) Coordination with other deductions.--No deduction
shall be allowed under any other provision other this chapter
with respect to any expenditure with respect to which a
deduction is allowed or allowable under subsection (a) to the
taxpayer.
``(c) Recapture Upon Early Disposition.--
``(1) In general.--If a taxpayer disposes of any qualified
timber property (or any timber thereon) with respect to which a
deduction was allowed under subsection (a) within the 10-
taxable-year period beginning with the taxable year in which
such deduction was claimed, such property shall be treated as
section 1245 property, and the amount required to be recaptured
as ordinary income shall be determined under section 1245 and
included in gross income for the taxable year of disposition.
``(2) Recapture amount.--For purposes of applying section
1245, the amount subject to recapture shall not exceed the
deduction allowed under subsection (a) with respect to such
property.
``(3) Partial dispositions.--In the case of a disposition
of only a portion of the qualified timber property, the
applicable portion of the deduction allowed under subsection
(a) shall be subject to recapture under section 1245 in the
same proportion that the disposed portion bears to the entire
property.
``(4) Exceptions.--Paragraph (1) shall not apply to a
disposition which occurs by reason of--
``(A) casualty, condemnation, or governmental
taking, or
``(B) death of the taxpayer.
``(d) Regulations.--The Secretary shall prescribe such regulations
as necessary or appropriate to carry out this subsection, including
rules for determining proportional allocations.''.
(b) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of subtitle A is amended by inserting after
the item relating to section 194A the following new item:
``Sec. 194B. Treatment of reforestation expenditures for qualified
natural disasters.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2026.
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