Due to the clear value drops in Otherside land, Yuga Labs will now be subject to a giant tax obligation and owes the IRS a lot of money. This obligation is related to the original sale being at much higher prices.
Yuga Labs Tax Obligation
@NateAlexNFT reported on Twitter that Yuga Labs, the creators of Bored Ape Yacht Club, Otherside land, and the $APE coin are down $200 million on $APE.
This has led to Twitter debating on what they do and don’t owe to the IRS.
One user put forward a scenario that sees Yuga Labs owe the IRS hundreds of millions: “$APE goes to $6 over the next 7 months. Yuga owes the IRS all the $APE they own from the land sale that brought in $300m originally.”
A user responded with “That’s if they are based out of USA. The Otherside is registered in a tax haven”. If this is the case, then Yuga Labs will avoid US tax rates. To clarify, a tax haven is a country or independent area where taxes are levied at a low rate.
Otherside is Yuga Labs’ answer to metaverse-based land. They released 55,000 Otherside land plots, bringing the total mint value to over $300 million. It is a new metaverse featuring a blend of technology from web3-based virtual spaces.
After the original trailer launch on March 19th, fans of the Bored Ape Yacht Club NFT collection were extremely hyped. However, since then, the price of $APE has dropped massively from its ridiculous all-time highs.
The mint price was 305 ApeCoin, worth about $5,800 at the time of mint. The mint was a record-setting one at the time.
Pre-mint, users were provided with tens or hundreds of thousands in some cases worth of the $APE coin. Some sold too early before a big peak, some too late after it went down a bit, and some still remain holding their reduced coin value.