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It has been pointed out that buying a Tesla car with bitcoin in the United States could result in a tax bomb. This is because Bitcoin is classified as an investment asset.
On the 25th (local time), the US economic media CNBC broadcast said Elon Musk, Tesla CEO, could buy Tesla with bitcoin, but reported that it could mean a bigger tax bill.
The U.S. Internal Revenue Service (IRS) classifies virtual currencies such as Bitcoin as assets, not legal currencies. This means that buying a car with bitcoin is subject to capital gains tax, which can cost more than cash payments.
Tesla cars range from $38,000 to $80,000 depending on the model. The current bitcoin price is over $50,000 each, and you can buy a Tesla car by spending 1 or 2 bitcoins.
However, as U.S. tax authorities classify bitcoin as an asset with fluctuating prices, such as stocks, it could be taxing at the point of purchase.
According to CNBC Broadcasting, the price of bitcoin a year ago was around $6700. If at that point the person who bought bitcoin would benefit from buying a $38,000 Tesla Model 3 at a price of more than five times cheaper.
If the holding period of bitcoin is less than one year, the market gain is classified as a short-term gain, and a normal income tax rate of 10 to 37% is applied depending on the total income. In addition, if the holding period of bitcoin is more than one year, an additional capital gains tax of up to 20% will be added.
Earlier, Musk’s CEO declared on his Twitter that “Now you can buy Tesla with bitcoin.”
In the case of bitcoin payments, the difference will be charged in US dollars. This is how the buyer pays the bitcoin for the price.
Eunji Cha, reporter Hankyung.com [email protected]
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