Comment Re:Do you declare unaccessible bitcoins to IRS (Score 1) 43
Gemini tells me that as long as the guy doesn't spend any of the bitcoins since this was a transfer only at this time, there's nothing to report to the IRS. He didn't buy any bitcoins or sell any bitcoins. wallet transfers are not counted by the IRS as a transaction. No past taxes or back reporting is necessary. When he does finally sell these bitcoins, he'll have to pay capital gains on 100% of their current value since his starting value ("purchase" if you will) was zero presumably. He'll want to make sure he has established a virtual paper trail now for any future time that he finds himself needing to pay taxes on this.
Interesting stuff. Wish I had some bitcoins to find on my hard drive.