Yuga Labs Faces Giant Tax Obligations as APEcoin Drops in Prices
Yuga Labs, the creator behind the BAYC NFT collection is going to face giant tax obligations as APEcoin ($APE) drops in value. Let's take a look at the scale of it, shall we?
Giant tax obligations await Yuga Labs. Why?
Last Sunday, Twitter user @jeff_jackerson claimed that Yuga Labs is going to owe IRS a ton of money, from the Otherside land sale. Accordingly, these NFT lands were sold at a much higher price back in April. Coupled with the drop in APEcoin ($APE) prices, Yuga is about to face huge tax obligations by the end of this year.
To understand the situation better, let's take a look at some of the figures for the Otherside land sale. Back on April 30th, Yuga sold out 55,000 NFT land plots at a price of 305 $APE each. From there, the team pocketed $320 million in revenue based on $APE trading at $19.07 at that time.
Well, guess what? As of writing, $APE is trading at $3.50. So instead of $320 million, all proceeds from the Otherside land sale are now worth $58.7 million only. That's a $261 million drop in dollar value! Given the fact that IRS calculates taxes in USD, not crypto, Yuga is probably going to have a hard time paying those taxes in USD.
Can Yuga Labs do anything about it?
It looks like not all hope is lost though. According to Twitter user @chibiapegang, the Otherside is registered in a tax haven based outside the USA. So, the US tax system does not apply to the project. Phew!
But even if the Otherside project is based in the USA, Twitter users are never short of ideas when it comes to tax evasion. According to @KingCyrusCrypto, Yuga would just have to convert their proceeds to USD, then back into $APE to book a loss before the end of the year.
Though we do not encourage any form of tax evasion or truly understand how the US tax system works, the topic has gained much attention within the NFT community. Anyway, what do you think? Will Yuga Labs still face tax issues with the Otherside land sale?