S. 4171

119 S4171 IS: Virtual Currency Tax Fairness Act
 U.S. Senate
 2026-03-24
 text/xml
 EN
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 II  119th CONGRESS  2d Session  S. 4171  IN THE SENATE OF THE UNITED STATES   March 24, 2026   Mr. Budd  introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains or losses from certain sales or exchanges of virtual currency, and for other purposes.
1.
Short title
This Act may be cited as the   Virtual Currency Tax Fairness Act  .
2.
Virtual currency
(a)
In general
Part III of subchapter B of  chapter 1  of the Internal Revenue Code of 1986 is amended by inserting after section 139L the following new section:
139K.
De minimis gain or loss from sale or exchange of virtual currency
(a)
In general
Subject to subsection (b), gross income shall not include gain or loss from the sale or exchange of virtual currency, unless the sale or exchange is for—
(1)
cash or cash equivalents,
(2)
any property used by the taxpayer in the active conduct of a trade or business, or
(3)
any property held by the taxpayer for the production of income (as described in section 212(2)).
(b)
Limitation
(1)
In general
Subsection (a) shall not apply in the case of any sale or exchange for which—
(A)
the total value of such sale or exchange exceeds $200, or
(B)
the total gain or loss which would otherwise be recognized with respect to such sale or exchange exceeds $200.
(2)
Aggregation rule
For purposes of this subsection, all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as one sale or exchange.
(c)
Virtual currency
For purposes of this section, the term  virtual currency  means a digital representation of value which—
(1)
functions as a unit of account, a store of value, or a medium of exchange, and
(2)
is not a representation of the United States dollar or any foreign currency.
(d)
Inflation adjustment
In the case of any taxable year beginning in a calendar year after 2027, each dollar amount in subsection (b)(1) shall be increased by an amount equal to—
(1)
such dollar amount, multiplied by
(2)
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting  calendar year 2026  for  calendar year 2016  in subparagraph (A)(ii) thereof.
 Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $10.
 .
(b)
Clerical amendment
The table of sections for part III of subchapter B of  chapter 1  of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139L the following new item:
Sec. 139K. De minimis gain or loss from sale or exchange of virtual currency.
  .
(c)
Effective date
The amendments made by this section shall apply with respect to transactions entered into after December 31, 2026.