Only a quarter of U.S. crypto owners are adequately prepared to file taxes on their digital assets, according to a survey commissioned by CoinTracker.
The survey, conducted by Wakefield Research, showed that as of March 27 just 4 of the 100 people polled had filed their tax assessments, according to a press release. As many as 74% said they were looking for more help from their exchanges on how to manage their crypto taxes.
With the U.S. tax filing deadline due April 18, the data suggest many investors lack knowledge on how to prepare their crypto-specific tax returns. Many don’t know what constitutes a taxable event, the survey showed. As many as 40% of participants did not know that selling crypto was subject to taxation, with 48% unaware that sales of non-fungible tokens (NFTs) fell into this category.
It is “not surprising that the vast majority of cryptocurrency users are unprepared to file their taxes” because the subject is so complex, CoinTracker COO Vera Tzoneva said in an email.
Holders of digital assets have to pay taxes when selling crypto or NFTs for profit, gifting crypto over $15,000, using crypto to pay for goods and services, or trading one token for another. Holding crypto for less than a year before selling makes investors susceptible to short-term capital gains tax, whereas over a year is long term and different rates apply.
CoinTracker, a digital asset portfolio manager that allows investors to view their crypto holdings across different exchanges and wallets, said it aims to use the survey to develop programs to educate users and better prepare them for filing taxes, according to a press release.
“We work in tandem with our partners to write concise and accurate tax-related content to be published on our partners’ platforms and serve their communities,” said Tzoneva, who joined the company in September from Google. “We have also partnered with various platforms to offer continuous professional education (CPE) courses for CPAs focused on crypto taxation.”
After a $100 million funding round in January, CoinTracker has formed partnerships with Coinbase, OpenSea, Intuit’s TurboTax, Phantom and Blockchain.com to aid users in tax payments, according to a press release.