Yesterday, Tesla turned on the option to buy their car using bitcoin. During a time when bitcoin’s almost exclusively been used to hold and trade, using it to actually pay for something is rare.
Here is how the payment option appears on Tesla’s website:
Tesla’s FAQs show how it’s not as seamless as credit card payments are:
It notes in all caps that “bitcoin transactions cannot be reversed” and “if you input the bitcoin address incorrectly, your bitcoin may be irretrievably lost or destroyed.”
Customers are also responsible for directly paying all bitcoin transaction fees associated with their purchase, and Tesla warns that although bitcoin payments typically take less than an hour to complete, this can extend to up to “one day or more.”
And
because of bitcoin volatility, Tesla warns that the value of any refund made in bitcoin “might be significantly less” than the value of bitcoin relative to US dollars at the time of purchase.
– You can now buy a Tesla with bitcoin in the US
And Bloomberg reports that using Bitcoin to buy Tesla is the equivalent of selling an asset, and will attract tax if you had bought it at a lower price than today’s.
If you got rich buying Bitcoin a year ago, Elon Musk is inviting you to purchase one of his cars with some of the proceeds. The taxman will be watching if you do.
That’s because cashing in the digital asset for a shiny, new Tesla will count as realizing a capital gain.
The inverse is also true. If you bought the token when it peaked at around $61,000 earlier this month and don’t want to hold on, converting part of it to a Model 3 would give you a tidy tax deduction next year
– Using Bitcoin to Buy a Tesla? Get Ready to Hear From the IRS
In the USA at least, this means that using bitcoin to buy something is like spending stocks or gold, not money. Because the market regulator, the SEC, currently classifies it as a commodity not currency. This is weird. And exciting.