Today’s crypto user is a mainstream participant in the financial world, with a recent survey revealing that 76 percent of crypto investors also invest in traditional stocks, and 83 percent have investments outside of crypto.
In their 2026 report, Coinbase and Cointracker revealed that these investors are not tax avoiders; 74 percent are aware that crypto is taxable, 65 percent have previously reported crypto activity, and 15 percent have never needed to report as they have not yet had any taxable activity.
However, this intent to comply is undermined by widespread confusion and complexity on crypto taxability. While 56 percent claim to have at least a good grasp on the basics of crypto taxes, almost two-thirds were unaware of the upcoming 2025 tax rules.
Users struggle to navigate the complexities of crypto taxation
The concept of taxability is often misunderstood, as only 49 percent of investors correctly understand that crypto is taxable anytime it is sold, while almost a quarter mistakenly believe simple transfers trigger tax events.
The report reveals that crypto investors struggle with rapidly evolving legislation. 56 percent rate their knowledge of crypto tax rules as good or excellent, but almost two-thirds (61 percent) were unaware of specific tax rules slated for the 2025 tax year reporting.
“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. With the resources we’ve made available this tax season, our goal is to help our users reconcile unknown cost basis data, understand their requirements and file accurately with confidence,” said Lawrence Zlatkin, Vice President of Tax, Coinbase.
For 2025 tax year reporting, the IRS introduced a new Form 1099-DA, which reports gross proceeds for digital asset transactions. Brokers are not currently required to report cost basis on Form 1099-DA to the IRS for tax year 2025.
Although some brokers may provide cost basis on the recipient’s copy of Form 1099-DA as a courtesy, users remain responsible for calculating the adjusted cost basis for all their 2025 crypto transactions, including reconciling digital asset movements across various platforms, and accurately reporting this information on their personal tax returns.
Read: Bybit enables crypto trading in UAE Dirhams with new AED trading pairs
Investors turn to AI to complete tax processes
In seeking solutions, most users rely on general tax software and/or accountants, with only 8 percent currently using crypto-specific vendors.
Users are also turning to AI to complete their tax-related tasks and scour for additional deductions and savings, including making calculations for taxable income, cost basis and capital gains, receiving personalized tax recommendations, and 30 percent go as far as saying they rely on AI to complete the entire tax process.
This environment of high compliance intent but low functional understanding highlights a critical need for accessible, accurate and integrated crypto tax solutions.
