According to CoinDesk, tax lawyer Robert W. Wood recently said that the US Internal Revenue Service treats Bitcoin and other cryptocurrencies as property. This means that each property transfer can trigger taxation, which has a tax impact on both the recipient and the transferor. The key issue is the market value at the time of the transfer. Some cryptographic investors place encryption on legal entities such as companies, limited liability companies, or partnerships. Another way is to hold a trust of encrypted assets. In the case of the North Carolina Department of Taxation v. Kimberley Rice Kaestner's 1992 Family Trust, the US Supreme Court unanimously stated that a state could not levy a tax on the trust income of an out-of-state resident without minimum contact. We should note that trusts can be taxed differently depending on their type. People often use a life trust to conduct real estate planning, but the life trust is not taxed separately. If you transfer Bitcoin to a living trust, you usually do not need to pay taxes. Because the lifetime trust is not an independent taxpayer, you still report the proceeds or losses of the sale on your individual tax return. There are also non-granting trusts, and the assignor will not be taxed because of it. These are taxed separately and must be submitted as a separate trust tax return. The trust tax rules can be complex, which means that the trust itself has to pay taxes. Another type of tax can be imposed on the beneficiary allocation. Where the trust company pays taxes depends on the situation. Some trusts are foreign, and these rules are complicated, but if you are an American, you should not assume that you can evade US taxes through foreign trusts.