- Most US crypto investors risk tax penalties due to a poor understanding of the new IRS reporting rules.
- Confusion over taxable events and cost basis leaves many crypto users exposed to costly filing errors.
- Global regulators tighten crypto tax rules as investors still struggle with compliance basics.
Nearly two-thirds of U.S. crypto investors are entering tax season unaware of updated IRS reporting requirements. A survey of 3,000 users by Coinbase and CoinTracker found widespread confusion around cost basis, taxable events, and Form 1099-DA, raising risks of costly filing mistakes.
New IRS Crypto Tax Rules Confuse Investors
As per the report, while 74% of investors know their crypto activity is taxable, 61% didn’t know about the updated reporting rules. Only a small fraction use tools to track crypto taxes, and many struggle to manage their records.
“Users are struggling to navigate the complexities of crypto taxation,” said Lawrence Zlatkin, Coinbase’s Vice President of Tax. “Our goal is to help users file accurately with confidence.”
Many investors remain unclear about what qualifies as a taxable event. Nearly 49% believe selling crypto triggers taxes, while 41% think transferring assets to a bank is taxable. Another 36% assume taxes apply only above certain profit thresholds.
Moving funds between wallets also creates confusion. About 71% of users transferred crypto between accounts, but only 35% updated their cost basis correctly.
CoinTracker Head of Tax Strategy Shehan Chandrasekera warned that users must calculate cost basis, holding periods, and gains accurately. He noted that brokers may not provide full accounting for the 2025 reporting requirements. Mistakes could result in penalties, including fines for intentional violations.
Crypto Tax Compliance Still Lags Globally
Most crypto traders are still relying on general tax software (78%) or accountants (52%) to manage their tax obligations. Only 8% are using specialized crypto tax products, despite the importance of tracking their assets across multiple exchanges.
Meanwhile, global regulators are tightening oversight. Vietnam has introduced a 0.1% crypto transaction tax, while South Korea is reviewing crypto custody practices after losing $4.8 million tied to a leaked wallet phrase. The developments highlight growing pressure on investors to improve compliance.
Related: Canada Considers Ban on Political Cryptocurrency Donations After UK
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