Hurricane Hugo Timber Tax Assistance Act

Hurricane Hugo Timber Tax Assistance Act - Amends the Internal Revenue Code to provide a tax deduction for timber losses resulting from Hurricane Hugo. Makes such deduction inapplicable to certain corporations. Increases the dollar limitation in the amortization of reforestation expenditures incurred after September 18, 1989, and before January 1, 1992, with respect to Hurricane Hugo property. Excludes any deduction for Hurricane Hugo timber damage assessment expenses as a miscellaneous itemized deduction.

Provides for the nontaxable treatment of the sale or exchange of timber damaged by Hurricane Hugo and of the use of such proceeds for related mortgage payments.

Exempts from late-filing penalties any taxpayer affected by Hurricane Hugo who fails to file a return during a specified period.

Amends the Internal Revenue Code to provide for the treatment of passive timber activities under the passive loss rules, for losses suffered as a result of Hurricane Hugo.