Sponsors (9)
The bill gives timber owners much bigger and inflation-protected immediate tax relief for reforestation (including very large disaster-related allowances) and simplifies pass-through treatment, at the cost of reduced federal revenue, recapture rules and caps that limit benefits for some owners, and additional compliance complexity and short-term filing uncertainty.
Timber owners affected by natural disasters (owners of qualified timber property) can immediately deduct disaster-related reforestation costs up to $500,000 per property and $1,000,000 in the aggregate, sharply lowering taxable income in the year of the expense.
Owners of qualified timber property can deduct up to $30,000 per property annually for reforestation (up from $10,000), providing larger immediate tax relief for forest owners and small timber businesses.
Dollar limits on reforestation deductions and disaster caps are indexed for inflation starting after 2026, preserving the real value of the deduction over time for timber owners.
Larger immediate reforestation deductions (both the $30,000 per-property increase and the disaster-related allowances) reduce federal tax revenue, which could modestly increase the deficit or crowd out other spending unless offsets are provided.
Taxpayers who claim the deduction face a 10-year recapture as ordinary income if they dispose of the property within that period, potentially triggering significant tax bills on sale or transfer.
Per-property and aggregate caps (and limits on separate filers) restrict total relief for large timber owners, meaning some replacement costs may remain nondeductible, especially for very large properties or operations.
Based on analysis of 3 sections of legislative text.
Raises reforestation expensing caps, adds inflation indexing, and creates a new immediate deduction for disaster-related reforestation with per-property and aggregate caps.
Official title: To amend the Internal Revenue Code of 1986 to allow for limited full expensing of certain reforestation expenditures.
Introduced April 28, 2026 by Buddy Carter · Last progress April 28, 2026
Raises existing tax caps that let landowners treat certain reforestation costs as current expenses, and creates a new tax election allowing immediate deduction of large, disaster-related reforestation expenses for timber property after a Presidential disaster declaration. The bill also adds automatic inflation adjustments for the updated caps and sets rules for recapture, eligibility, and coordination with other tax provisions. The changes apply to amounts paid or incurred in taxable years beginning after December 31, 2026, include per-property and aggregate limits with separate married-filing rules, and establish recordkeeping, allocation, and regulatory authority for Treasury to implement the new deduction and inflation indexing.