As Other Side’s Land Values Fall, Yuga Labs Faces a Giant Tax Liability
Due to the sharp declines in value in the Otherside lands, Yuga Labs will now be subject to a giant tax liability and will owe the IRS a lot of money. This obligation is linked to the fact that the initial sale was made at much higher prices.
Tax liability of Yuga Labs
@NateAlexNFT reported on Twitter that Yuga Labs, creators of Bored Ape Yacht Club, Otherside land and $APE coin lost $200 million on $APE.
This has led Twitter to debate what they should and shouldn’t of the IRS.
One user offered a scenario that Yuga Labs owes the IRS hundreds of millions: “$APE goes to $6 in the next 7 months. Yuga owes the IRS all of the $APE he owns from the sale of the land which originally brought in $300 million.
One user replied “That’s if they’re based in the US. The Other Side is registered in a tax haven”. If so, then Yuga Labs will avoid US tax rates. To clarify, a tax haven is a country or an independent area where taxes are levied at a low rate.
Otherside is Yuga Labs’ answer to metaverse-based earth. They freed up 55,000 plots of Otherside land, bringing the total value to over $300 million. It is a new metaverse featuring a mix of technologies from Web3-based virtual spaces.
After the original trailer launched on March 19, fans of the Bored Ape Yacht Club NFT Collection were extremely excited. However, since then, the price of $APE has fallen massively from its all-time highs.
The price of the mint was 305 ApeCoin, worth around $5,800 at the time of the mint. The Mint was a record at the time.
Before manufacturing, users received tens or hundreds of thousands of APECoin. Some sold out too soon before a big spike, some sold out too late after a slight dip, and some still hold their reduced coin value.