I bought Ethereum through Coinbase, which will be reported on my taxes. Then I used that Ethereum to obtain NFTs. I still have some "left-over" Ethereum and the NFTs. Do I need to report the NFT purchase to the IRS?
ONLY SALES are reported on the tax return ... what the proceeds bought is immaterial. When you sell those in the future you will report those sales at that time.
You will have to report the exchange from Ethereum to NFT.
You do not have to report anything yet on the additional Ethereum that you have, and
You do not have to report anything on the NFT
Thank you so much @JohnB5677 JohnB5677 for answering!
What is the form I need to use for to report the exchange from Ethereum to NFT when I file my taxes?
Thanks again for your assistance with this!
Capital Assets go on form 8949 and are consolidated on Sch D before moving to your 1040. See .About Form 8949, Sales and Other Dispositions of Capital Assets. It is entered in the program in the same place as a stock or other asset would be listed.
Additionally, if you have a foreign wallet, that is a foreign asset and may require filing Form 8938. See About Form 8938, Statement of Specified Foreign Financial Assets