Yuga Labs will now be subject to a massive tax requirement and owes the IRS a large sum of money as a result of the clear value reductions in Otherside land. This responsibility stems from the fact that the initial transaction was for substantially more money.

Tax Obligation at Yuga Labs

Yuga Labs, the inventors of Bored Ape Yacht Club, Otherside Land, and the $APE coin, are down $200 million on $APE, according to @NateAlexNFT on Twitter.

This has sparked a debate on Twitter over what they owe the IRS and what they don’t owe.

One user proposed a scenario in which Yuga Labs owes the IRS hundreds of millions of dollars: “Over the next seven months, $APE will be $6. Yuga pays the IRS all of the $APE they received on the land sale, which initially brought in $300 million.”

“That’s if they’re based in the United States,” one commenter replied. The Other Side has a tax haven registration.” If this is the case, Yuga Labs will be able to avoid paying US taxes. To be clear, a tax haven is a nation or independent territory with low tax rates.

Land on the Other Side

Yuga Labs’ solution to metaverse-based territory is Otherside. They sold 55,000 parcels of land on the Otherside, increasing the total mint value to more over $300 million. It’s a new metaverse that combines web3-based virtual places with technologies from other metaverses.

Fans of the Bored Ape Yacht Club NFT collection were ecstatic after seeing the first trailer on March 19th. Since then, though, the price of $APE has plummeted from its heady all-time highs.

The mint price was 305 ApeCoins, which were valued almost $5,800 at the time. At the time, the mint was a world record holder.

Users were given tens or hundreds of thousands of APECoins before to the mint. Some sold too soon before a major peak, some sold too late after it fell a little, while some still cling on to their depreciated currency worth.

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