A recent survey by Coinbase and CoinTracker shows that many cryptocurrency investors are unclear about basic tax rules. More than half of those surveyed didn’t fully understand when their crypto transactions are taxable.
This lack of knowledge could lead to mistakes when reporting taxes, especially as the U.S. IRS introduces new forms like 1099-DA. Simple actions, such as transferring crypto between wallets, are often misunderstood as taxable events.
The survey highlights that while investors want to comply with tax laws, tracking transactions across multiple wallets and platforms makes it challenging to calculate gains and losses accurately.
Widespread Confusion About Crypto Taxes
A recent report, the 2026 Crypto Tax Readiness Report, shows that many crypto investors don’t fully understand basic tax rules.
Only 49% of users know that selling crypto is a taxable event, while nearly one in four people mistakenly think that simply transferring crypto triggers taxes.
This confusion exists even among experienced users and can lead to mistakes when reporting taxes.
With crypto held across multiple wallets and platforms, keeping track of taxable events becomes even harder. Educating investors about these rules is crucial to ensure proper compliance and avoid unexpected tax issues.
The Multi-Platform Problem
Many crypto investors use several wallets and exchanges, which makes tracking taxes harder.
On average, users manage 2.5 platforms and 83% use self-custodial wallets. Because assets are spread across different accounts, calculating the cost basis, the original purchase price used to figure out gains or losses, becomes confusing.
This can lead to mistakes when reporting taxes, even for investors who want to comply. Managing multiple platforms requires extra care and accurate record keeping.
More: Stablecoin Payments Under $200 May Become Tax-Free in US
Challenges With 1099-DA Forms
Form 1099-DA was introduced to make crypto tax reporting easier, but it can be confusing for many users. Coinbase plans to send over four million forms to customers with less than $600 in crypto earnings.
A big challenge is that many users don’t have complete cost basis information, which is needed to calculate profits or losses accurately. This means they often have to track transactions across multiple wallets and platforms themselves.
Even routine activities, like sending stablecoins or paying Ethereum gas fees, can count as taxable events, adding extra complexity for everyday investors.
User Intent vs Compliance Reality
Even though many crypto investors are confused about taxes, most want to follow the rules. However, owning crypto across multiple wallets and platforms makes reporting more complicated.
Tracking the cost basis, the original purchase price used to calculate gains or losses, can be tricky when assets are spread out. The survey found that only 35% of users had updated their cost basis in the past.
This shows that while intentions are good, the practical reality of managing multiple accounts and transactions makes it hard for investors to accurately calculate and report their crypto taxes.
Matt Price, a former IRS special agent and current director of investigations at Elliptic, says calculating crypto cost basis can be tricky, but standardized reporting is a big step forward.
The new 1099-DA forms make crypto tax reporting more organized, similar to how traditional investments use 1099-B forms. This change helps investors by clearly showing taxable events and reduces the need for manual checks by authorities.
Overall, it makes compliance easier, prevents mistakes, and aligns cryptocurrency with standard financial practices, giving both regulators and users a clearer and simpler way to handle crypto taxes.
Digital Tools and AI to the Rescue
Many crypto investors are using digital tools to make tax reporting easier. The survey found that 78% of users rely on general tax software, while 52% get help from accountants.
A smaller group uses crypto-specific tools to track their transactions. Interest in AI-based solutions is growing, with nearly half of investors open to using AI to calculate taxes automatically.
These tools help simplify the process, especially for people who hold crypto across multiple wallets or platforms. By using software and AI, investors can better manage their taxes and avoid mistakes.
