Sponsors (2)
The bill gives large, targeted tax relief to timber owners to speed reforestation and disaster recovery (with indexed regular and substantial disaster deductions), but does so at the cost of reduced federal revenue and introduces some legal, administrative, and eligibility limits that may complicate filing and long-term tax planning.
Owners of qualified timber property (including farmers, timber small businesses, and rural landowners) can deduct or expense much larger reforestation costs — regular expensing raised to $30,000 per property (indexed for inflation) and a disaster-related deduction up to $500,000 per property ($1,000,000 aggregate) — lowering taxable income and reducing near-term tax bills.
Indexing the regular expensing dollar limits for inflation preserves the real value of the tax benefit over time, preventing gradual erosion of relief from rising prices.
Larger, more certain tax relief for reforestation can encourage landowners to invest in reforestation and timber management, supporting rural forestry activity and timber-industry jobs.
Expanding and substantially increasing these deductions (regular and disaster) will reduce federal tax revenue and could increase the federal deficit or require spending offsets, with the cost borne by taxpayers generally.
Taxpayers who claim the large deduction may face a 10-year recapture rule if they dispose of the property, potentially creating a future ordinary-income tax liability and complicating long-term planning for owners and farmers.
The disaster-related deduction is limited to losses from disasters declared under the Stafford Act, excluding many loss events that aren't Presidential-declared and narrowing who can claim the benefit.
Based on analysis of 3 sections of legislative text.
Raises reforestation expensing limits (to $30k and inflation-indexed) and adds a new elective disaster-related reforestation deduction with high per-property and aggregate caps.
Official title: Amend the Internal Revenue Code of 1986 to allow for limited full expensing of certain reforestation expenditures.
Introduced April 29, 2026 by Bill Cassidy · Last progress April 29, 2026
Creates two tax changes to encourage reforestation of privately owned timberland: (1) raises the existing annual per-property expensing cap for reforestation costs and requires future inflation adjustments; and (2) adds a new elective deduction for disaster-related reforestation expenditures with large per-property and aggregate limits, rules excluding reimbursed costs, and a 10-year limited recapture if the property is disposed. Both sets of changes apply to taxable years beginning after December 31, 2026.