Tax plan says Californians can’t write off rebuilding costs after disasters

House version plans would remove deduction for uninsured personal losses

Thomas Fire in Ventura County (Getty Images)
Thomas Fire in Ventura County (Getty Images)

Californians have been rallying against Congress’s tax bill for several reasons — including higher taxes and increased traffic — but now there’s a new sticking point in the plan for residents suffering from widespread wildfires.

Both the House and Senate versions of the bill propose limiting the amount of money homeowners can write off from losses sustained in natural disasters and wildfires, the Los Angeles Times reported.

The House version of the bill plans to completely remove the deduction for uninsured personal losses stemming from wildfires and other types of disasters. The Senate version would allow people to claim deductions only after the president has declared it a federal disaster.

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It’s likely the final bill will include the federal disaster deduction, according to House Majority Leader Kevin McCarthy, of Bakersfield. That means people will have to pay for rebuilding costs out of pocket, if the disaster isn’t large enough to be considered a federal emergency.

Americans deducted $1.6 billion in 2015 for uninsured losses in disasters that failed to receive federal emergency status, according to the Internal Revenue Service. Just this year, nearly 58,000 wildfires have burned more than 9 million acres in the U.S., according to the National Interagency Fire Center.

Multiple fires have been ravaging the Golden State since early last week, with the Skirball fire destroying multiple homes in wealthy Bel Air, including those of former NBA player Andrei Kirilenko and media mogul Rupert Murdoch. The Thomas Fire continues to blaze through 230,000 acres in Ventura and Santa Barbara counties. [LAT] – Natalie Hoberman