Tesla Accepts Bitcoin Payment, But Tax is a Problem

Tesla CEO Elon Musk officially announced on his Twitter account on Tuesday that the purchase of Tesla cars in the United States can be paid with Bitcoin. This is also another big step after Tesla announced that it has purchased $1.5 billion worth of Bitcoins last month. In addition, he also stated that the Bitcoin car purchases Tesla received will not be converted into legal tender, and will remain in Bitcoin.

According to the customer support page of the company's official website, customers who buy cars with bitcoin must pay through their bitcoin wallet. Underpayment or omission will result in cancellation of the order, and other digital currencies are currently not supported.

As for when customers outside the United States can enjoy the service, Musk said that it can be done "later this year", but he did not specify which countries or regions will be supported.

However, buying a car with Bitcoin seems good, but some media have also warned that the tax cost of doing so may not be cost-effective, because Bitcoin and other cryptocurrencies are classified according to the judgment standards of the U.S. Internal Revenue Service (IRS) It is a property, so spending bitcoins and selling bitcoins for cash are required to pay capital gains tax for the appreciation between the transactions. Ryan Losi, Certified Public Accountant (CPA) of Piascik, gave an example of this:

For example, last year you bought a bitcoin with $3,000, and the current market price is more than $50,000. If you use it to pay for a car, you need to declare at least $47,000 in appreciation as a capital gain. The IRS will determine the fair value of Bitcoin on the payment date and compare it with the tax base on the Bitcoin acquisition date.

In terms of the applicable tax rate, the specific will depend on the length of time the Bitcoin is held. If you hold the currency for more than one year, the long-term capital gains tax to be paid is between 0% and 20% depending on the annual income. Otherwise, you need to pay the short-term capital gains tax equal to the income tax rate. Unless the annual income is less than $40,000, the applicable tax rate is at least 15%. According to the calculation of the guide price given by Tesla's US official website, if it is to buy Model 3, without calculating subsidies, the tax payable is at least close to 5700 US dollars.