Due to the sharp drop in value in otherside country, Yuga Labs will now be subject to a gigantic tax liability and owe a lot of money to the IRS. This obligation is related to the fact that the initial sale was at much higher prices.

Tax liability of Yuga Labs

@NateAlexNFT reported on Twitter that Yuga Labs, makers of Bored Ape Yacht Club, Otherside Land and $APE coin lost $200 million on $APE.

This has led to Twitter debating what they do and don’t owe the IRS.

One user suggested a scenario where Yuga Labs owes the IRS hundreds of millions: “$APE rises to $6 in the next 7 months. Yuga owes the IRS all APE they own from the land sale, which originally raised $300 million.”

One user replied, “That’s if they’re based outside of the US. The other side is registered in a tax haven”. If this is the case, Yuga Labs will avoid US tax rates. To clarify, a tax haven is a country or independent territory that collects taxes at a low rate.

Other country

The Other Side is Yuga Labs’ answer to Metaverse-based land. They released 55,000 Otherside lots, bringing the total value of the mint to over $300 million. It’s a new metaverse with a mix of technologies from Web3-based virtual spaces.

After the original trailer launched on March 19th, fans of the Bored Ape Yacht Club NFT collection were extremely hyped. Since then, however, the price of $APE has fallen massively from its ridiculous all-time highs.

The coin price was 305 ApeCoin, which was worth approximately $5,800 at the time of minting. The mint was record-breaking at the time.

Pre-Mint, users were provided with tens or hundreds of thousands in some cases worth the $APE coin. Some were sold too early before a big peak, others too late after it had fallen a bit, and some still retain their reduced coin value.