What would happen if someone was to lose access to their wallets? Would they still have to pay taxes? If my memory serves me right, close to 4 million bitcoins are missing.
So if you mined and then traded $100k in Bitcoin for Ethereum and then the Ethereum was stolen, you would use form 4684 to claim the loss against your taxable income.
But I haven't heard of anyone doing this yet and I can imagine it would get some scrutiny from the IRS, seeing as it would be hard to prove a loss or theft.
You only pay capital gains taxes on them in the years where you sell.
Keep in mind that in the IRS's eyes, any exchange (like BTC -> LTC) counts as a sale, and so does buying goods with crypto (like buying a video game with BTC).