How to file your The SandBox (SAND) taxes with Koinly
The SandBox is a metaverse game built on the Ethereum blockchain and SAND is the native currency. Players can buy, sell, and swap SAND tokens, as well as earn them through a huge variety of means. Although the Sandbox metaverse is virtual, metaverse tax implications are rather real. Whatever your SAND transactions, Koinly can help you calculate your taxes for SAND and thousands of ERC-20 tokens, as well as ERC-721 & ERC-1155 tokens.
Sign up to Koinly and choose your country and currency
Connect Ethereum with Koinly to import all your trades safely and securely - including ERC-20 tokens like SAND
Koinly identifies the cost basis of your tokens and coins, as well as your taxable transactions
Koinly calculates any capital gains, losses, and income from your taxable transactions
Koinly generates your crypto tax report - ready to help you file with your tax office, or hand it over to your accountant.
How are SAND tokens taxed?
It should come as no surprise that tax offices haven't released guidance on the potential tax implications of metaverses like The Sandbox - but that doesn't mean there aren't any. Instead, you (or your accountant) will need to interpret the existing guidance from your tax office (you can find this in our crypto tax guides) and apply it to your SAND transactions. But for a general overview, two taxes may apply to your SAND transactions:
Capital Gains Tax: Selling, swapping, or spending crypto including SAND tokens is a disposal of an asset, and any gain is subject to Capital Gains Tax.
Income Tax: Earning new SAND tokens - for example, by earning SAND by renting land or selling NFTs - may be viewed as additional income and subject to Income Tax based on the fair market value of your SAND tokens in your fiat currency at the time you received them.
As well as this, there are tax implications for your Sandbox NFTs. For the most part, NFTs are viewed exactly the same as crypto assets from a tax perspective, so that means selling or trading NFTs is a disposal, and any gain is subject to Capital Gains Tax. However, if you're creating and selling ASSETs for SAND regularly, this may potentially be viewed as income instead and subject to Income Tax.
Can the IRS track SAND?
The question on everyone's mind... can the IRS track crypto? And are they interested in your Sandbox transactions if they can? Let's break it down.
SAND is an ERC-20 token on the Ethereum blockchain and, like most other blockchains, Ethereum is a public ledger. That means anyone, anywhere can search for a given address to view the transactions made - including the IRS. So if the IRS can link your identity to a given wallet or transaction - then they may know about your SAND investments.
As well as this, if you've traded or staked SAND using a centralized exchange, many of these exchanges issue 1099 forms to users with specific earnings. These 1099 forms contain personal data, like your name and address, and whenever you receive a 1099 form, so does the IRS.
The next obvious question is, is the IRS in interested in taxing the metaverse? The IRS hasn't yet released any specific guidance on the tax implications of The Sandbox, but it doesn't mean the IRS isn't paying attention, especially when virtual land in The Sandbox is selling for millions - like when Republic Realm bought a parcel of land for $4.3 million. Transactions like this are sure to attract the attention of the IRS and other tax offices.
To avoid an unwelcome audit or crypto tax penalties, you should report your gains and income from crypto investments - including SAND - accurately.
How to get SAND tax documents
The majority of tax offices require investors to report their gains, losses, and income from crypto investments, including SAND, in their annual tax returns.
To do this, you'll first need to calculate your gains, losses, and income from SAND, which starts with identifying each taxable transaction and the kind of tax that applies. Then you'll calculate a capital gain or loss for each disposal of SAND or the fair market value in your fiat currency for any SAND tokens considered additional income.
You have to do this not just for SAND, but for every crypto you've invested in - and it's time-consuming. This is why most investors use a crypto tax calculator like Koinly to save themselves hours of spreadsheets and manual calculations. Koinly can calculate your gains, losses, and income for more than 450,000 ERC-20 tokens - including SAND. You just need to connect Ethereum to Koinly, here's how.
How to import SAND transactions to Koinly automatically
To import your SAND transactions into Koinly, you’ll need to connect each Ethereum wallet you use to Koinly.
This is really easy to do, you just need your public address - but remember, you’ll need to do this for each Ethereum wallet you use to interact with SAND in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, and more. If you're interacting with ASSETS (NFTs) in The Sandbox as well, Koinly also supports ERC-1155 and ERC-721 tokens too, so your ASSETs are supported as well - you just need to import your transactions the same way you would your SAND transactions.
You can find steps on how to connect a variety of popular wallets to Koinly on our integration pages, but here’s an example of how it generally works.
In your wallet
Open or log in to your wallet
Select Ethereum
Copy your public address
On Koinly
Sign up or log in to your Koinly account and go to the wallets page
Search for and select Ethereum
Give your wallet a name
Paste your public address
Important
Remember, you’ll need to do this for every wallet you use to interact with SAND tokens in order to calculate your crypto taxes correctly. If you've interacted with SAND on centralized exchanges, you'll need to connect these too. Find out how to connect each using API or by uploading a CSV file on our integration pages.
It’s really helpful to name your wallets when you’re adding them to Koinly - you'll be able to find transactions more easily later on!
You may also be able to upload your transaction history to Koinly as a CSV file instead of connecting using your public address if you prefer, but this depends on the wallet you’re using. You can search for your wallet on our integration pages to find out more about how to get a CSV file from your wallet.
Your frequently asked questions
What is The Sandbox?
The Sandbox is a virtual, browser-based world, built on the Ethereum blockchain, where players can build, own, and monetize their gaming experience.
What are SAND tokens?
SAND is the native currency of The Sandbox metaverse. Players can use SAND to buy ASSETs and sell ASSETs for SAND, as well as spend or earn SAND in-game.
How can I get SAND tokens?
What is the price of SAND?
Like all cryptocurrencies, SAND price varies depending on market conditions. SAND had a previous all-time high of $8.44 and a previous all-time low of $0.02894.
How many SAND tokens are there?
SAND has a circulating supply of 1.49 billion and a maximum supply of 3 billion.
What is the purpose of SAND tokens?
SAND tokens are what The Sandbox metaverse runs on, so you can buy or sell ASSETs and experiences using SAND. As well as this, you can buy, sell and trade SAND tokens on centralized and decentralized exchanges like you could with any other token or cryptocurrency.
Is SAND a good investment?
The Sandbox is a popular blockchain game but, like all other crypto platforms, it hasn't been immune to turbulent market conditions. However, The SandBox still has many active daily users and the daily trading volume of SAND remains relatively high. As always, you should DYOR before investing.
How can I store my SAND tokens?
SAND tokens can be stored in any hot or cold wallet that supports ERC-20 tokens, but it's important to store your tokens securely.
What blockchain are SAND tokens on?
SAND is an ERC-20 token on the Ethereum blockchain.
Do I have to report my SAND tokens to the IRS?
Yes, you need to report any gains, losses, or income from crypto including SAND (or any ASSETs) to the IRS as part of your annual tax return. If you don't, you'll face penalties and fines.
How are The Sandbox NFTs taxed?
ASSETs in The Sandbox are NFTs, specifically ERC-1155 tokens. From a tax perspective, these share many of the same implications as any other crypto asset. So when you dispose of an NFT by selling it or swapping it, you'll generally pay Capital Gains Tax on any gain. However, if you're creating and selling ASSETs for SAND in The Sandbox marketplace, this could potentially be seen as additional income and subject to Income Tax upon receipt.
Does Koinly support Sandbox NFTs?
Yes. Koinly supports ERC-1155 & ERC-721 tokens, as well as ERC-20 tokens. All you need to do is connect the wallet holding your Sandbox NFTs to Koinly using your public address and Koinly will automatically import your transactions. Find out more about how Koinly imports NFTs.
Can you make real money on The Sandbox?
Yes. Land in The Sandbox sold for millions at its peak, and many investors made a lot of money by selling land and other NFT ASSETs. Although all earnings relating to The Sandbox are in SAND, this is easily converted to fiat currencies like USD, AUD, GBP, and more using centralized exchanges.
What can you do in The Sandbox?
Build, own, create - pretty much anything you can think of is possible in The Sandbox. Players can explore, play in-game games, socialize, attend events, and more.
Who is investing in The Sandbox?
Some notable mentions of celebrities, businesses, and brands that have either purchased land or created unique experiences for fans in The Sandbox include Atari, Ledger, Adidas, Snoop Dogg, Playboy, and The Walking Dead.
