TL;DR
- Only 49% of surveyed U.S. crypto users correctly identified selling as the point when crypto becomes taxable, while nearly a quarter wrongly flagged simple transfers.
- The report surveyed 3,000 users, finding 74% know crypto is taxable and 65% have reported activity before.
- Tax complexity worsens because users average 2.5 wallets or exchanges, 83% use self-custody, and 1099-DA forms will exclude cost basis for investors starting in 2025.
A majority of U.S. crypto users still do not understand one of the market’s most basic obligations. The striking part is not that tax reporting remains difficult, but that even the trigger for taxation is widely misunderstood. A new readiness survey found that only 49% of respondents correctly recognized that crypto becomes taxable when it is sold. Nearly a quarter incorrectly believed that simple wallet-to-wallet transfers can create a tax event. That disconnect matters because it suggests confusion starts before users even reach the more technical parts of filing and cost-basis calculation.
Why the confusion runs deeper than one tax question
The survey’s broader results make the misunderstanding harder to dismiss as a knowledge gap. Many users appear willing to comply, yet still seem underprepared for the mechanics of compliance. The findings came from a survey of 3,000 U.S. crypto users conducted between Sept. 9 and Oct. 3 ahead of the 2025 tax reporting season. While 74% said they know crypto is taxable and 65% said they have reported activity before, the report argues those numbers undercut the stereotype that crypto investors simply ignore tax obligations.
The problem becomes more complicated once users move beyond a single exchange account. Crypto tax reporting is turning into an operational challenge because holdings are scattered across platforms that do not automatically share the information needed to calculate gains. Respondents reported using an average of 2.5 wallets or exchanges, and 83% said they use self-custody. From the 2025 tax year onward, brokers will issue Form 1099-DA, but without cost basis included, leaving investors to reconcile transactions themselves. In practical terms, the paperwork may increase as the reporting burden becomes more fragmented for many households.
That mismatch helps explain why traditional tools still dominate, even as confidence remains shaky. Users may feel they understand crypto taxes, but their behavior suggests they still reach for familiar systems while looking for easier answers. About 78% of respondents said they use general tax software, and 52% rely on accountants, while only 8% use crypto-specific tax services. At the same time, interest in automation is rising: nearly half said they would use AI to calculate taxes, and 30% said they would trust it for the process. The result is a market that wants compliance, but still lacks clarity.
