‘You can now buy a Tesla with bitcoin,’ CEO Elon Musk said. But it could mean a big tax bill

‘You can now buy a Tesla with bitcoin,’ CEO Elon Musk said. But it could mean a big tax bill

You may be aware that you can now purchase a Tesla using bitcoin.

Tesla CEO Elon Musk announced late Tuesday that it is now possible to buy Tesla vehicles in the U.S. with bitcoin.

"You can now buy a Tesla with bitcoin," Musk tweeted.

If the idea appeals to you, here's a twist: the taxman will be hovering with palm out.

When you use bitcoin to purchase goods or services, you are in effect selling that cryptocurrency. And for tax purposes, the IRS treats bitcoin and its brethren as property whose sale comes with either a gain or loss depending on whether it is worth more or less than when you acquired it.

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"It's really important to know the cost basis of any cryptocurrency “” the value when you bought it “” and the timing of that," said Garrett Watson, a senior policy analyst at the Tax Foundation. "That's going to determine how much is subject to tax and what tax rate you're paying."

Right now, one bitcoin is worth about $56,000, up from about $6,700 a year ago. Last month, Tesla announced that it had