A joint survey from Coinbase and CoinTracker finds that most U.S. crypto users intend to be tax compliant but often face confusion about taxable events, cost basis tracking, and a new information return in the first year of digital asset broker reporting requirements.
Crypto Users Surveyed
The 2026 Crypto Tax Readiness Report surveyed 3,000 U.S. crypto users in the fall of 2025. The report characterizes today’s crypto user as a mainstream financial participant, noting that 76% also invest in traditional stocks and 83% hold investments outside of crypto. About 74% are aware that crypto is taxable, 65% have previously reported crypto activity on their returns, and another 15% have not yet needed to report because they have not had any taxable activity, such as buying and holding.
The report found that this compliance intent is not matched by a functional understanding of when a tax obligation is triggered. Only 49% of respondents correctly identified that a taxable event occurs every time crypto is sold, while 41% identified a transfer to a bank account as a taxable event, and nearly a quarter said the same of moving assets between their own wallets. Approximately 61% were unaware of the specific reporting rules that took effect for the 2025 tax year.
Shehan Chandrasekera, head of tax strategy at CoinTracker, described two types of taxpayers among those who check the digital asset question on their returns. “Some people are checking that box correctly, and then after that, they’re correctly tackling the gains and losses,” he told Checkpoint. “There’s another cohort of people — they just check the box, and they don’t report anything afterwards because of lack of knowledge.”
Form 1099-DA and the 2025 Reporting Season
The 2025 tax year is the first in which brokers are required to issue Form 1099-DA, Digital Asset Proceeds from Broker Transactions, following final regs issued by the IRS in 2024 (TD 10000). Chandrasekera said the inaugural year of the form was not smooth for the industry, with some brokers issuing it early, others taking available extensions, and still others releasing more complex forms.
Under the 2025 rules, brokers had to report only gross proceeds from digital asset sales, not cost basis, generally the original purchase price needed to determine a gain or loss. Some brokers voluntarily included cost basis on the user-facing copy of the form, but Chandrasekera noted that this information often did not align with taxpayers’ own records, particularly where assets had been transferred in from another platform. Because exchanges do not share transaction data with each other, a receiving broker has no way of knowing what an asset’s original purchase price was.
The form does not cover all transaction types. Chandrasekera noted that wrapping, airdrops, lending, certain stablecoin transactions, and types of NFT activity are not reflected in the 1099-DA, leaving users responsible for reporting those transactions separately.
Lawrence Zlatkin, vice president of tax at Coinbase, was quoted in the report saying that users are “struggling to navigate the complexities of crypto taxation.” Zlatkin added that the goal is to “help our users reconcile unknown cost basis data, understand their requirements, and file accurately with confidence.”
Covered and Non-Covered Assets
Beginning with the 2026 tax year, brokers will have to report cost basis to the IRS for the first time — but only for “covered” assets, defined as those purchased on a centralized exchange after January 1, 2026, that have never been transferred off that platform. Assets bought before 2026 or moved between wallets at any point are considered “non-covered,” and taxpayers remain responsible for tracking their own basis in those holdings.
A recent IRS notice (Notice 2026-20) addressed how taxpayers may treat broker-reported cost basis for the 2026 tax year, even for covered assets. “Basically, even for the 2026 tax year, you could use your books and records and override the broker’s cost basis if you want to,” Chandrasekera said. “This confusion is going to happen for another year.”
The report notes that if cost basis is not provided to the IRS, the agency may assume a cost of zero, resulting in overstated gains. Despite 76% of users being aware that cost-based adjustments may be necessary, the report found that only 35% had actually made such an adjustment in the past.
Recordkeeping and Best Practices
Chandrasekera recommended that taxpayers treat the Form 1099-DA as a starting point and maintain their own detailed transaction history using a crypto-specific tax aggregator. Only 8% of users currently employ such tools, while 78% rely on general tax software. “You have to kind of maintain your own books and records, very detailed,” he said. “Using a crypto tax software is your books and records today.”
He also suggested consolidating holdings into fewer wallets and exchanges where possible — a practice he described as “wallet hygiene” — while staying mindful of the security risks that come with concentration.
For transactions where guidance remains unsettled, such as wrapping or bridging assets between blockchains, Chandrasekera recommended taking a conservative tax position and keeping documentation. He said that as long as taxpayers have documentation in their records, they can show that documentation and walk auditors through their thinking process. “If you show a good faith effort, which you can prove through substantiation, it’s highly unlikely for you to get into things like criminal trouble.”
For more on digital asset basis, see Checkpoint’s Federal Tax Coordinator 2d ¶ P-1181.
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