If you only purchased Ethereum (ETH) and withdrew it immediately without selling, trading, or using it for transactions, you do not need to report it as taxable income. The IRS generally considers taxable events to include:
- Selling cryptocurrency for fiat currency (USD, etc.).
- Trading one cryptocurrency for another.
- Using cryptocurrency to purchase goods or services.
- Earning cryptocurrency through mining, staking, or rewards.
However, the IRS does ask taxpayers to answer a digital asset question on their tax return, even if they didn’t engage in taxable transactions. You need to check “No” on the form if you only purchased and withdrew ETH without any taxable events.
From Coinbase.com
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