Most crypto investors are not trying to avoid the IRS. They just do not know the rules. That is the central finding of the 2026 Crypto Tax Readiness Report, a new survey of 3,000 US crypto investors conducted by CoinTracker and Coinbase. The data shows a striking disconnect: 65% of respondents had already reported crypto on their taxes, yet more than half could not correctly identify basic taxable events.
Most Investors Know Crypto Is Taxable but Don’t Know When
74% of respondents acknowledged that their crypto activity is taxable in some form. But only 49% correctly identified that a tax obligation is triggered at the point of sale. A capital gain, which is the profit you make when you sell a crypto asset for more than you paid, becomes a taxable event the moment the sale occurs, whether or not your broker sends you a form.
22% of respondents believed that transferring crypto between a wallet and another account triggers a tax event. It does not. Moving your own assets from one wallet to another is not a taxable event under current IRS guidance.
61% of Investors Have Not Heard of the New IRS Form 1099-DA
For the first time, centralized brokers were required to report US customers’ crypto sales to the IRS using Form 1099-DA for the 2025 tax year. The IRS now receives a matched record of most retail crypto activity before a single taxpayer files a return. Yet 61% of survey respondents said they were unaware of these new reporting rules.
This matters in a practical way. Sarah, for example, sold $20,000 worth of Ethereum on a centralized exchange in 2025. Her broker issued a 1099-DA and sent a copy to the IRS. If Sarah’s tax return does not reflect that sale, the IRS already has the data to flag the discrepancy. Her final tax bill would depend on her cost basis and holding period, but the risk of receiving a notice is now much higher than in prior years.
Cost Basis Tracking Is Where Most Investors Fall Short
Cost basis is what you originally paid for a crypto asset. It is used to calculate your taxable gain or loss at the point of sale. The survey found that investors use an average of 2.5 wallets or exchanges, with 83% holding at least some assets in self-custodial wallets. Yet only 35% reported adjusting their cost basis accurately across platforms.
The report also found that 76% of respondents were aware that cost basis adjustments may be required, but only 35% had actually made them. An additional 41% said they knew about cost basis adjustments but had not done them, and 16% said they did not know what adjusting cost basis means. When cost basis records are incomplete, investors may end up overstating their gains or unknowingly underreporting.
Only 8% of Investors Use Crypto-Specific Tax Tools
78% of respondents rely on general tax software, and 52% use a traditional accountant. Only 8% use crypto-specific reconciliation tools designed to track cost basis across multiple wallets and exchanges automatically.
That gap may be closing. Interestingly, 47% of respondents said they would use AI to help calculate taxable income, capital gains, and cost basis. 30% said they would be comfortable letting AI handle their entire tax process. As multi-wallet tracking grows more complex, that appetite for AI automation is likely to grow.
Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.
