Crypto Tax Confusion Deepens as US Investors Struggle With Cost Basis and Reporting Duties

Data shows that regulatory awareness remains uneven despite strong participation in financial markets. Coinbase said on social media platform X:

Evolving tax rules are adding pressure on users already struggling with reporting accuracy, particularly with the rollout of Form 1099-DA for the 2025 tax year. The form captures gross proceeds from digital asset transactions but often excludes cost basis details when assets move between platforms that do not share transaction data. This leaves taxpayers responsible for reconstructing cost basis, reconciling transfers, and calculating gains or losses, increasing the likelihood of inflated tax obligations when data is incomplete.

Coinbase explained:

“This year brokers are issuing Form 1099-DA for the first time. It reports your gross proceeds – but not cost basis. If you don’t report it yourself, the IRS can default it to $0. Meaning your entire sale is treated as profit, and you could owe taxes on gains that never happened.”

Interest in automation is increasing as users seek solutions to these challenges. While 78% rely on general tax software and 52% consult accountants, only 8% use crypto-specific tools. Adoption of artificial intelligence is emerging, with 47% open to using AI for tax calculations, 43% for strategy recommendations, and 30% willing to rely on it for the full process. Shehan Chandrasekera, CPA and head of tax strategy at Cointracker, opined:

“Users need to be aware of the costly repercussions of inaccurate or incomplete digital asset tracking.”