Holding crypto through a legal entity: a single-member LLC (disregarded), a multi-member LLC or partnership, an S corporation, or a trust.
The entity changes who reports and how, not whether. A disregarded LLC reports on your Schedule D as if you held the coins directly. A partnership or S corporation tracks basis at the entity level and passes gains through on a K-1, which adds a return and a basis schedule but can simplify multi-owner holdings. A trust has its own rate schedule. Moving crypto into an entity is usually a non-taxable contribution; moving it out can be a distribution with its own rules.
For a single owner it changes nothing on the tax side. For multiple owners, an estate plan, or a business, an entity can make sense. It is a legal and planning question before it is a tax one.
Source: IRC 721; IRC 1361; Treas. Reg. 301.7701-3
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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