S. 3173 - Claiming Losses After Disasters Act

117TH CONGRESS
1ST SESSION

S. 3173

To amend the Internal Revenue Code of 1986 to provide special
rules for personal casualty losses arising from major disasters.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 4, 2021

Mr. KENNEDY introduced the following bill; which was read
twice and referred to the Committee on _____

A BILL

To amend the Internal Revenue Code of 1986 to provide special rules for personal casualty losses arising from major disasters.

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 "Claiming Losses After Disasters Act".

SEC. 2. SPECIAL RULES FOR CASUALTY LOSSES ARISING FROM MAJOR DISASTERS.

(a) TREATMENT OF LOSSES. —

(1) IN GENERAL. — Section 165(h) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(6) SPECIAL RULE FOR QUALIFIED DISASTER LOSSES. —

"(A) IN GENERAL. — If an individual has a qualified net disaster loss for any taxable year, the amount determined under paragraph (2)(A)(ii) shall be the sum of —

"(i) such net disaster loss, and

"(ii) so much of the excess referred to in the matter preceding clause (i) of paragraph (2)(A) (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual.

"(B) QUALIFIED NET DISASTER LOSS. — For purposes of subparagraph (A), the term 'qualified net disaster loss' means the excess of qualified disaster-related personal casualty losses over personal casualty gains.

"(C) QUALIFIED DISASTER-RELATED PERSONAL CASUALTY LOSSES. —

"(i) IN GENERAL. — For purposes of this subsection, the term 'qualified disaster-related personal casualty losses' means losses described in subsection (c)(3) (determined after application of paragraph (1)) which arise in a qualified disaster area on or after the first day of the incident period of the qualified disaster to which such area relates, and which are attributable to such disaster.

"(ii) QUALIFIED DISASTER AREA. —

"(I) IN GENERAL. — The term 'qualified disaster area' means any area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act if the incident period of the disaster with respect to which such declaration is made begins after December 27, 2020.

"(II) EXCEPTION. — Such term shall not include any area which is a qualified disaster area as defined in section 301 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

"(iii) QUALIFIED DISASTER. — The term 'qualified disaster' means, with respect to any qualified disaster area, the disaster by reason of which a major disaster was declared with respect to such area.

"(iv) INCIDENT PERIOD. — For purposes of this paragraph, the term 'incident period' means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred.".

(2) CONFORMING AMENDMENT. — Section 165(h)(5)(B)(ii) of such Code is amended by inserting "or (6)" after "paragraph (2)(A)".

(b) DOLLAR LIMITATION. — Section 165(h)(1) of the Internal Revenue Code of 1986 is amended by striking "$500 ($100 for taxable years beginning after December 31, 2009)" and inserting "$100 ($500 in the case of any net disaster loss to which paragraph (3) applies)".

(c) STANDARD DEDUCTION. —

(1) IN GENERAL. — Section 63(c)(1) of the Internal Revenue Code of 1986 is amended by striking "and" at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting "and", and by adding at the end the following new subparagraph:

"(C) the disaster loss deduction.".

(2) DISASTER LOSS DEDUCTION. — Section 63(c) of such Code is amended by adding at the end the following new paragraph:

"(8) DISASTER LOSS DEDUCTION. — For the purposes of paragraph (1), the term 'disaster loss deduction' means the excess of qualified net disaster losses (as defined in section 165(h)(6)(B)) over the amount of personal casualty gains (as defined in section 165(h)(3)(A)) reduced by any portion of such gains taken into account under section 165(h)(5)(B)(i).".

(d) TREATMENT UNDER ALTERNATIVE MINIMUM TAX. — Section 56(b)(1)(D) of the Internal Revenue Code of 1986 is amended by inserting "(other than the disaster loss deduction)" after "section 63(c)".

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to losses incurred in taxable years beginning after December 31, 2019.