Most crypto users aim to comply with tax requirements. Still, confusion over reporting rules and transaction tracking continues to create friction, according to a new industry report.
A joint study by Coinbase and CoinTracker revealed that: 74% of users know that cryptocurrency is taxable and 65% have reported crypto activity in the past.
But understanding remains uneven: Only 49% correctly identify when a taxable event occursand almost two-thirds are unaware of upcoming rule changes.
The findings suggest that compliance is not the primary issue. Instead, users face challenges navigating the increasingly complex reporting landscape.
IRS 1099-DA rules expand reporting requirements
The increased complexity comes as the US government begins standardizing crypto tax reporting. Form 1099-DA.
Under new guidance from the Internal Revenue Service and the Treasury Department, digital asset brokers will be required to provide transaction statements detailing revenues from crypto activities, with updated rules allowing electronic submission of those forms starting in 2027.
The changes are intended to streamline reporting and reduce administrative burdens, reflecting the largely digital nature of crypto transactions. But as regulators expand their oversight of the industry, they are also formalizing expectations for tax reporting.
Cost basis complexity remains unresolved
Despite these updates, a key challenge remains unresolved: calculating cost basis.
Crypto users often trade on multiple exchanges, wallets and platforms, and the average 2.5 platforms per user and 83% use personal storage wallets.
This fragmented activity makes it difficult to track the original purchase price of assets, which is necessary to calculate gains or losses.
Although Form 1099-DA will report gross receipts, users are still responsible for determining adjusted cost bases and reconciling transactions between platforms.
Only 35% of survey respondents said they have adjusted cost basis in the pastIt highlights a significant gap between regulatory requirements and user capacity.
The report identifies this mismatch as a central problem where increasing compliance expectations are yet to be met with accessible tools or user understanding.
Artificial intelligence emerges as a potential solution
As complexity increases, users turn to automation for support.
Almost half of respondents (47%) said they would use AI tools to calculate taxable income and capital gains. In comparison, 30% said they would trust AI to handle the entire tax process.
Despite this change, traditional methods still dominate. 78% use general tax software and 52% trust accountants.
Final Summary
- Most crypto users aim to comply with tax rules, but confusion around reporting and cost-based tracking remains widespread.
- New IRS reporting requirements increase transparency but do not fully address the complexity users face.
