The confusion surrounding cryptocurrency taxation in the United States is deepening. Despite widespread adoption of digital assets, most investors are aware of their tax obligations but struggle to execute them accurately, as new reporting rules and increasing portfolio complexity widen compliance gaps.
Survey Reveals Gap Between Knowledge and Execution
A report released on March 30, 2026, by Coinbase and Cointracker, based on a survey of 3,000 users, found that 74% of respondents recognize crypto activity as taxable, yet many face challenges in accurate reporting. Coinbase stated on social media platform X: “We surveyed 3,000 crypto investors on their tax readiness. One stat stood out: 76% know cost basis might be problematic but only 35% have ever actually fixed it.”
Lawrence Zlatkin, vice president of tax at Coinbase, commented: “The story this data tells is one of uncertainty. Users are struggling to navigate the complexities of crypto taxation, which is why it’s so important for us to help bridge that knowledge gap.” Notably, nearly 61% of respondents were unaware of the updated 2025 tax rules, even as 56% described their understanding of crypto taxation as good or excellent.
Form 1099-DA: A Hidden Cost Trap Under New Rules
Evolving tax rules are adding pressure on users already struggling with reporting accuracy, particularly with the rollout of Form 1099-DA for the 2025 tax year. This form captures gross proceeds from digital asset transactions but often excludes cost basis details when assets move between platforms that do not share transaction data. Taxpayers are left responsible for reconstructing cost basis, reconciling transfers, and calculating gains or losses. If data is incomplete, the IRS can default cost basis to $0, treating the entire sale as profit and potentially taxing gains that never occurred.
Coinbase explained: “This year brokers are issuing Form 1099-DA for the first time. It reports your gross proceeds – but not cost basis. If you don’t report it yourself, the IRS can default it to $0. Meaning your entire sale is treated as profit, and you could owe taxes on gains that never happened.”
Investor Behavior and Tool Usage
The report also reveals that digital assets are integrated into broader investment strategies. About 83% of users hold assets beyond crypto, and 76% invest in traditional stocks. While 65% have previously reported crypto taxes and 15% have not triggered taxable events, confusion about compliance requirements persists. Only 49% correctly identify that selling crypto triggers taxation, while 41% mistakenly associate tax liability with transferring funds to a bank. Furthermore, 71% have moved assets across wallets or exchanges, complicating tracking.
In terms of tools, 78% rely on general tax software, 52% consult accountants, but only 8% use crypto-specific tools. Adoption of artificial intelligence is emerging: 47% are open to using AI for tax calculations, 43% for strategy recommendations, and 30% willing to rely on it for the full process. Shehan Chandrasekera, CPA and head of tax strategy at Cointracker, warned: “Users need to be aware of the costly repercussions of inaccurate or incomplete digital asset tracking.”
This tax confusion is pushing Congress to face urgent calls for modernizing cryptocurrency tax policy, balancing compliance, competitiveness, and innovation.