This bill provides tax relief for wildfire victims. It adds fire to the list of conditions allowing farmers to defer gain on livestock sales for up to four years. It also excludes from taxable income disaster payments received for specific 2024 Texas wildfires including the Smokehouse Creek, Windy Deuce, and Grape Vine Creek fires, whether from government agencies or Xcel Energy.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
This bill provides tax relief for wildfire victims. It adds fire to the list of conditions allowing farmers to defer gain on livestock sales for up to four years. It also excludes from taxable income disaster payments received for specific 2024 Texas wildfires including the Smokehouse Creek, Windy Deuce, and Grape Vine Creek fires, whether from government agencies or Xcel Energy.
Last updated: 12/30/2025
Official Summary
Congressional Research Service summary
<p><strong>Wildfire Victim Tax Relief and Recovery Act</strong></p><p>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.</p><p>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.)</p><p>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).</p><p>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</p><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>
Key Points
Main provisions of the bill
Adds fire to livestock sale gain deferral conditions
Allows up to 4-year deferral for fire-related livestock sales
Excludes Texas wildfire payments from taxable income
Covers Smokehouse Creek Fire in Hutchinson County
Covers Windy Deuce and Grape Vine Creek fires
Includes payments from government and Xcel Energy
How This Impacts Americans
Potential effects on citizens and communities
This bill provides targeted relief for ranchers and victims of devastating 2024 Texas Panhandle wildfires that killed over a million cattle. The livestock provision helps farmers who must sell herds due to fire by deferring capital gains taxes. Excluding settlement payments from Xcel Energy and government aid from income ensures victims keep the full benefit of compensation. This targeted relief addresses a specific disaster while also improving general wildfire provisions for farmers.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
496, 119th Congress (2025). "Wildfire Victim Tax Relief and Recovery Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-496
