Virtual Currency Tax Fairness Act

This bill, titled the "Virtual Currency Tax Fairness Act," aims to simplify tax reporting for small virtual currency transactions by excluding certain de minimis gains or losses from gross income. It introduces a new section to the Internal Revenue Code of 1986, Section 139K, to implement this exclusion. The primary goal is to alleviate the tax burden on everyday virtual currency use. The exclusion applies to transactions where both the total value of the sale or exchange and the total gain or loss recognized do not exceed $200 . However, this de minimis exclusion does not apply if the virtual currency is exchanged for cash or cash equivalents property used in an active trade or business property held for the production of income . An aggregation rule ensures that related transactions are treated as one for the purpose of this limit. For the purposes of this section, "virtual currency" is defined as a digital representation of value that functions as a unit of account, store of value, or medium of exchange, but is not a representation of the U.S. dollar or any foreign currency. The $200 limit will be adjusted for inflation in taxable years beginning after 2027. These amendments will take effect for transactions entered into after December 31, 2026.