S. 4171 — Virtual Currency Tax Fairness Act

This section establishes an exclusion from gross income for de minimis gain or loss from the sale or exchange of virtual currency (i.e., a digital representation of value functioning as a unit of account, store of value, or medium of exchange, other than U.S. or foreign currency). The exclusion applies only to transactions not for cash or cash equivalents, property used in a trade or business, or property held for the production of income (as described in IRC §212(2)), and does not apply if the transaction value or gain or loss exceeds $200 (with aggregation for related transactions); the $200 thresholds are adjusted for inflation after 2027 based on the cost-of-living adjustment under IRC §1(f)(3) using 2026 as the base year. The provision applies to transactions after December 31, 2026.