Disaster Reforestation Act

This bill changes how timber businesses can claim a tax break after disasters. If uncut trees you grow to sell are lost to fire, storm, or theft, you can deduct at least the difference between the trees’ appraised value right before the loss and what you could salvage after. It also counts losses from wood‑destroying insects, invasive species, and severe drought, and it covers young trees that aren’t ready for market yet. Trees not held for sale, or timber tied to a passive investment, do not qualify.

To use this, you need an appraisal within one year of the loss, done by a federal or state‑certified appraiser under standard appraisal rules; if you can’t get it before your tax return is due, you may use your own estimate and then file an amended return once the appraisal is finished. You must replant or prepare the site within five years, or the tax benefit can be taken back. These changes apply to losses in tax years that start after the law takes effect.

Key points:

• Who is affected: Active timber businesses that hold trees for sale; not passive investors; includes young, pre‑merchantable timber.
• What changes: Disaster losses can be deducted based on pre‑loss appraised value minus salvage value; covers fire, storm, theft, insects, invasive species, and severe drought .
• When: Appraisal within one year; reforest within five years; applies to tax years beginning after enactment .