This one catches a lot of Amazon sellers off guard.

If you've ever sold cryptocurrency to fund your business (inventory purchases, software, advertising), those crypto sales are taxable events. The IRS treats crypto as property, which means every time you convert it to cash, you trigger a capital gain or loss.

And yes, this applies even if you immediately used the money to buy inventory.

Why this matters for Amazon sellers specifically:

A lot of new sellers fund their first inventory order by cashing out crypto gains. If you bought Bitcoin at $10K and sold at $40K to fund a $5,000 inventory order, you owe capital gains tax on the $30K gain. That's potentially $4,500-$7,000 in taxes that have nothing to do with your Amazon business, but are absolutely connected to it.

What you need to do:

1. Track every crypto-to-fiat conversion you used for business funding
2. Calculate your cost basis for each sale (what you originally paid for the crypto)
3. Report it separately from your Amazon business income (Schedule D, not Schedule C)
4. Keep records connecting the crypto sale to your business expense

We built a Crypto Tax Calculator that helps you estimate your liability from crypto sales used for business funding.

Estimate Your Crypto Tax Liability

For a deeper dive on freelancer and self-employment taxes (which apply to you as an Amazon seller), our sister site CeoCult has a complete tax survival kit with quarterly deadline trackers, deduction finders, and set-aside calculators.

Explore CeoCult's freelancer tax tools

Tomorrow (your final email): the Week 4 check-in. Are you profitable yet? Here's how to tell.

Let's build,
The BagEngine Team

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