Extension and Modification of Limitation on Casualty Loss Deduction
Section 70109 · Sec. 70109 ·
What this chapter is about
This part takes the end date off a limit on casualty loss deductions. It also opens the deduction to disasters declared by a state. A new term, State declared disaster, is defined. The changes start with tax years after December 31, 2025.
“Section 165(h)(5) is amended-- (1) in subparagraph (A), by striking ", and before January 1, 2026", and”
The section strikes the words and before January 1, 2026 from subparagraph (A) of section 165(h)(5) of the Internal Revenue Code of 1986, and replaces 2018 Through 2025 in the heading with Beginning After 2017.
What the document actually says
“Section 165(h)(5) is amended-- (1) in subparagraph (A), by striking ", and before January 1, 2026", and”
That sentence, in plain words
Words setting an end date are taken out. Those words were and before January 1, 2026.
What this is about
The heading is reworded to match. It now reads beginning after 2017. So the limit carries on with no end year.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
“The term `State declared disaster' means, with respect to any State, any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami,”
The section adds a new subparagraph (C) to section 165(h)(5) of the Internal Revenue Code of 1986 defining a State declared disaster as any natural catastrophe in any part of a State, including a hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm or drought, or any fire, flood or explosion whatever the cause, that the Governor of the State, or the Mayor for the District of Columbia, and the Secretary find severe enough to warrant applying the rules of the section. State includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands. The term is inserted into subparagraph (A) and into clause (i) of subparagraph (B).
What the document actually says
“The term `State declared disaster' means, with respect to any State, any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami,”
That sentence, in plain words
The term covers a natural disaster in any part of a state. The list gives storms, floods, waves and more.
What this is about
Fires and blasts count too, whatever the cause. The state governor and the Secretary must both agree. They must find the harm bad enough. Islands and the capital count as states.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70109 in the PDF
What the document says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
The section applies its amendments to taxable years beginning after December 31, 2025.
What the document actually says
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
That sentence, in plain words
The changes start with tax years that begin after December 31, 2025.
What this is about
Earlier tax years are not touched. The old rules still hold for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: strike the end date and reword the heading, extend the rules to State declared disasters, define that term and the term State, and fix the effective date.
The two insertions that carry the new term into existing clauses are carried in a summary rather than recorded as their own proposals.
The section works by amending section 165(h)(5) of the Internal Revenue Code of 1986, which is not indexed here, so what the casualty loss deduction is and how the limit works cannot be checked against anything on this site.
