# Wildfire Victim Tax Relief and Recovery Act

If you lost your home, property, or livestock in one of five major wildfires that swept through the Texas Panhandle in February and March of 2024, this bill gives you a significant tax break. Specifically, it makes sure that compensation money you receive from the government, Xcel Energy (the power company), or their insurance companies won't be counted as taxable income. This applies to payments for property damage, lost home value, real estate closing costs, and even inconvenience from being unable to access your property. Without this bill, people rebuilding their lives could face unexpected tax bills on top of their losses—this prevents that from happening.

The bill also helps farmers and ranchers who had to sell livestock because of the fires. Normally, if you sell animals from your farm or ranch, you have to pay taxes on the proceeds. But this bill extends special tax rules that already existed for flood-related livestock sales to also cover fire-related sales. This means farmers can defer paying taxes on the money they made from selling animals they lost to the fires, giving them more time and flexibility to rebuild their herds. The bill also allows them to replace lost livestock with other types of property without triggering immediate tax consequences—so if a rancher needs to sell cattle but can't immediately buy new ones, they won't face a tax penalty for that delay.

These changes apply to the five specific fires: the Smokehouse Creek Fire, Windy Deuce Fire, Grape Vine Creek Fire, 687 Reamer Fire, and Roughneck Fire, all of which started on or around February 26, 2024, in Hutchinson, Moore, and Gray counties. The tax relief is retroactive, meaning it covers compensation received starting from February 26, 2024, onward.

Wildfire Victim Tax Relief and Recovery Act

Rep. Jackson, Ronny [R-TX-13]

Wildfire Victim Tax Relief and Recovery Act&nbsp;This bill allows farmers to defer taxes on 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>