EXCLUSION OF ADDITIONAL LIVING EXPENSES.

SEC. 901. EXCLUSION OF ADDITIONAL LIVING EXPENSES. (a) Exclusion of Additional Living Expenses.—Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by renumbering section 123 as 124, and by inserting after section 122 the following new section: “SEC. 123. AMOUNTS RECEIVED UNDER INSURANCE CONTRACTS FOR CERTAIN LIVING EXPENSES. “(a) General Rule.—In the case of an individual whose principal residence is damaged or destroyed by fire, storm, or other casualty, or who is denied access to his principal residence by governmental authorities because of the occurrence or threat of occurrence of such a casualty, gross income does not include amounts received by such individual under au insurance contract which are paid to compensate or reimburse such individual for living expenses incurred for himself and members of his household resulting from the loss of use or occupancy of such residence. “(b) Limitation.—Subsection (a) shall apply to amounts received by the taxpayer for living expenses incurred during any period only to the extent the amounts received do not exceed the amount by which— “(1) the actual living expenses incurred during such period for himself and members of his household resulting from the loss of use or occupancy of their residence, exceed “(2) the normal living expenses which would have been incurred for himself and members of his household during such period.” (b) Conforming Amendment.—The table of sections for such art III is amended by striking out the last item and inserting in lieu thereof the following: “Sec. 123. Amounts received under insurance contracts for certain living expenses. “Sec. 124. Cross references to other Acts.” (c) Effective Date.—The amendments made by this section shall apply with respect to amounts received on or after January 1, 1969.