Interest in the cryptocurrency market rose after Tesla announced on the 23rd that it allowed it to purchase its own vehicles with bitcoin. yunhap news
Tesla, the world’s number one electric vehicle company, announced that it would use bitcoin, the leader of the cryptocurrency (virtual currency) market, as an additional payment method, but it was pointed out that it was not advantageous for consumers. This is because if you buy a car with bitcoin, you have to pay a lot of tax separately.
CNBC reported on the 24th (local time) that buying a Tesla electric car with bitcoin would result in a higher cost as a result of paying capital gains tax to the U.S. Internal Revenue Service (IRS).
The IRS already classifies cryptocurrencies such as Bitcoin as assets. It means that if you made a margin more than at the time of purchase, you have to pay income tax. Bitcoin was only $6700 each a year ago, but now it is around $56,000. CNBC explains that you may have to pay a lot of capital gains tax.
Tax experts say that U.S. tax law is complex enough to be difficult for individuals to easily access. The actual tax rate and amount paid for income tax can vary greatly from person to person.
“In the United States, cryptocurrencies such as bitcoin have also been converted to income-reported assets like stocks from 2018,” said Sang-ho Mok, a certified public accountant at a future accounting firm in the United States. It is a method, and the tax rates vary widely depending on annual income and asset holding period.”
However, unlike South Korea, which has decided to remove a 20% capital gains tax on capital gains exceeding 2.5 million won from next year, the US does not specifically apply a discriminatory tax rate for cryptocurrencies. In addition, the capital gains tax rate is only applied at a maximum of 20% when holding it for more than one year.
Tesla cars. / Photo = EPA
Meanwhile, the same media reported on the same day that Fidelity, a large American financial company that has strengths in retirement pension management, is preparing to launch the Bitcoin Listed Index Fund (ETF).
FD Fund Management, a subsidiary of Fidelity, has submitted preliminary registration documents to the US Securities and Exchange Commission (SEC) for issuance of Bitcoin ETFs. The product name is’Wise Origin Bitcoin Trust’.
Fidelity said, “As many investors want access to digital assets, the need to create a variety of products has increased.”
If the Bitcoin ETF applied by Fidelity gets approval from the authorities, it will be the first in the United States. In the United States, several financial companies are already fiercely competing for approval of the’No. 1 Bitcoin ETF’. Earlier, the Canadian government allowed the listing of the Bitcoin ETF for the first time in the world last month.
New York = Correspondent Jae-Gil Cho [email protected]
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