Sponsors (9)
Raises and indexes reforestation expense caps and creates a new immediate deduction for disaster-related reforestation with per-property and aggregate caps.
The bill gives timber owners much larger and inflation-protected immediate deductions (including large disaster-related write-offs) to aid recovery and management, but does so at the cost of reduced federal receipts, added compliance complexity, and rules (caps and a 10-year recapture) that can leave some owners facing taxes or uncertainty later.
Owners of qualified timber property (individual landowners, farmers, and small timber businesses) can immediately deduct up to $30,000 per property annually for reforestation expenses (up from $10,000), increasing near-term tax relief for routine reforestation activity.
Owners of qualified timber property who incur disaster-related reforestation costs can immediately deduct much larger amounts (up to $500,000 per property and $1,000,000 aggregate), substantially reducing taxable income in the year of disaster recovery.
Dollar caps on these reforestation deductions are indexed for inflation beginning after 2026, preserving the real value of the benefit over time for timber owners.
Timber owners who dispose of the property within 10 years face ordinary-income recapture of the deduction, which can create a substantial tax liability in the year of disposition.
Larger immediate reforestation deductions reduce federal tax receipts and could modestly increase the deficit or crowd out other spending unless offsets are provided.
Per-property and aggregate caps (and related limits) restrict relief for large timber owners, so owners with very large replacement costs may still face nondeductible expenses in early years.
Based on analysis of 3 sections of legislative text.
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
Allows landowners to write off more reforestation costs immediately and creates a new, temporary-style immediate deduction for reforesting timber damaged by a presidentially declared disaster. It raises the per-property annual reforestation expense cap (from $10,000 to $30,000) and indexes these caps for inflation starting after 2026. It also creates a new Code section letting taxpayers elect immediate deduction for disaster-related reforestation up to per-property and aggregate caps, with rules for married filers, pass-throughs, controlled groups, recapture, and coordination with other tax benefits.