To amend the Internal Revenue Code of 1986 to provide relief for losses resulting from natural disasters.

Amends the Internal Revenue Code to permit a deduction for demolition costs attributable to a federally declared disaster occurring after September 1, 1989.

Requires the passive activity loss of a taxpayer to be computed without regard to any loss attributable to such disasters.

Provides for treating such disasters as qualified inventory interruptions for businesses when determining their tax liability on inventories.