Buying crypto to buy inventory for business

Forum|Forum|2 years ago
January 27, 2024
1 reply
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Hello. I work in the social media industry, where crypto is commonly used to buy and sell products and services. First of all, I bought crypto using my debit card and then received crypto to my wallet. I then used crypto to pay for some digital products that I sold and was paid using PayPal. Would I be able to claim the cost of my crypto (the amount I paid through my bank) as a business expense since I am claiming income from these digital products that I sold? And then do I include all of the crypto transactions as an investment?

PatriciaV

Employee

The cost of the digital products you purchased would be a business expense. Purchasing crypto on your debit card is an exchange transaction (fiat to crypto) that has no tax implications.

However, selling crypto for any reason (including purchasing other assets) must be reported as an investment sale on your tax return. TurboTax has a dedicated module for reporting crypto transactions.

See this article for more information: TurboTax Cryptocurrency Guide

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