# Wildfire Victim Tax Relief and Recovery Act

This bill provides tax breaks for people and businesses affected by five major wildfires that swept through the Texas Panhandle in February and March of 2024. The fires—the Smokehouse Creek Fire, Windy Deuce Fire, Grape Vine Creek Fire, 687 Reamer Fire, and Roughneck Fire—destroyed homes, businesses, and farmland across several counties. The bill makes sure that money people receive to help them recover from these disasters won't be counted as taxable income.

If you lost your home or property in one of these fires and received compensation from the government, an insurance company, or Xcel Energy (the utility company), that money won't be treated as income for tax purposes. This applies to payments covering property damage, lost real estate value, closing costs if you had to sell damaged property, and even inconvenience costs like losing access to your land. Without this bill, victims could face a tax bill on top of their already devastating losses—essentially getting taxed for money meant to help them rebuild.

The bill also includes special tax relief for ranchers and farmers who had to sell livestock because of the fires. Normally, when you sell animals or property due to a disaster, you have to pay taxes on the proceeds. This bill extends the time farmers have to replace their lost livestock and allows them to use money from selling fire-damaged animals to buy different types of farm property without triggering immediate tax consequences. This gives agricultural businesses breathing room to recover and rebuild their operations after losing herds to the fires.

Wildfire Victim Tax Relief and Recovery Act

Jackson, Ronny

Wildfire Victim Tax Relief and Recovery ActThis bill allows farmers to defer taxes on&nbsp;gain from the sale or exchange of livestock because of a fire. (Conditions apply.) The bill also allows individuals to exclude from gross income (for tax purposes) certain disaster relief payments received in connection with specific Texas wildfires.Currently, farmers may defer gain on the sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes due to drought, flood, or other weather-related conditions for two years (four years if attributable to a federally-declared disaster). Otherwise, under current law, gain on the sale of livestock (including poultry) due to such weather-related conditions attributable to a federally-declared disaster may be deferred for one year. (Conditions apply.)The bill adds fire to the list of circumstances for which the gain on the sale or exchange of livestock may be deferred, thus allowing farmers to defer such gains for up to four years (depending on the type of livestock and whether the sale is attributable to a federally-declared disaster).The bill also allows individuals to exclude from gross income payments received from federal, state, or local government agencies or Xcel Energy (or any subsidiary, insurer, or agent of Xcel Energy) as compensation for unreimbursed losses, damages, and certain expenses attributable to the<ul><li>Smokehouse Creek, 687 Reamer, and Roughneck Fires (Hutchinson County, Texas, February and March 2024);</li><li>Windy Deuce Fire (Moore County, Texas, February 2024); and</li><li>Grape Vine Creek Fire (Gray County, Texas, February 2024).</li></ul>