Most crypto users intend to comply with tax requirements. Still, confusion around reporting rules and transaction tracking continues to create friction, according to a new industry report.
A joint study by Coinbase and CoinTracker found that 74% of users are aware that crypto is taxable, and 65% have reported crypto activity in the past.
However, understanding remains uneven: only 49% correctly identify when a taxable event occurs, and nearly two-thirds are unaware of upcoming rule changes.
The findings suggest that compliance is not the primary issue. Instead, users face challenges navigating an increasingly complex reporting environment.
IRS 1099-DA rules expand reporting requirements
The growing complexity comes as the U.S. government moves to standardize crypto tax reporting through Form 1099-DA.
Under new guidance from the Internal Revenue Service and Treasury Department, digital asset brokers will be required to provide transaction statements detailing proceeds from crypto activity, with updated rules allowing these forms to be delivered electronically starting in 2027.
The changes are intended to streamline reporting and reduce administrative burdens, reflecting the largely digital nature of crypto transactions. However, they also formalize expectations around tax reporting as regulators expand oversight of the sector.
Cost basis complexity remains unresolved
Despite these updates, a key challenge remains unresolved: cost basis calculation.
Crypto users often transact across multiple exchanges, wallets, and platforms, with the report showing an average of 2.5 platforms per user and 83% utilizing self-custody wallets.
This fragmented activity makes it difficult to track the original purchase price of assets, which is necessary to calculate gains or losses.
While Form 1099-DA will report gross proceeds, users are still responsible for determining their adjusted cost basis and reconciling transactions across platforms.
Only 35% of respondents said they had adjusted cost basis in the past, highlighting a significant gap between regulatory requirements and user capability.
The report identifies this mismatch as a central issue, in which rising compliance expectations are not yet matched by accessible tools or user understanding.
AI emerges as a potential solution
As complexity grows, users are turning to automation for support.
Nearly half of respondents [47%] said they would use AI tools to calculate taxable income and capital gains. In comparison, 30% indicated they would rely on AI to handle the entire tax process.
Despite this shift, traditional methods still dominate, with 78% using general tax software and 52% relying on accountants.
Final Summary
- Most crypto users intend to comply with tax rules, but confusion around reporting and cost basis tracking remains widespread.
- New IRS reporting requirements increase transparency, but do not fully address the complexity users face.
