<p>If you are known to own some bitcoin, then you might be expected to pay taxes at some point in the future, according to whatever tax laws you are subject to.</p>
<p>But if you outright lose your coins, then you probably won't be expected to pay those taxes anymore, as you 'won't be able to spend the coins in the future'.</p>

CC BY-SA 4.0
2021-08-21T20:49:13.757Z
2021-08-21T20:49:13.757Z
chytrik
<p>This is more of a frame-challenge than a direct answer:</p>
<blockquote>
<p>you only pay when you convert to fiat or spend the Bitcoin</p>
</blockquote>
<p>I don't think it's nearly that clear. For the longest time, there was little to no official guidance on how Bitcoin would be classified as well as what sort of documentation and reporting would be required. Even now as regulators are starting engage with the subject, many governments have vastly diverging views on how Bitcoin should be regulated—in some countries you even get differing guidance from various institutions of the same government.</p>

CC BY-SA 4.0
2021-08-21T17:32:53.893Z
2021-08-21T17:32:53.893Z
Murch
<p>I keep hearing of people who &quot;lost all their Bitcoin in a boating accident&quot;.</p>
<p>But if simply holding Bitcoin doesn't cost you anything -- you only pay when you convert to fiat or spend the Bitcoin -- why do they want to make everyone think they have lost their coins?</p>
<p>And what if they then want to spend some? Then how do they explain that &quot;boating accident&quot;?</p>

<lost-bitcoins>
If you "only" have to pay taxes when you sell/spend Bitcoin, why does the "boating accident" thing exist?
C C
# If you "only" have to pay taxes when you sell/spend Bitcoin, why does the "boating accident" thing exist?

(Asked by: username_0 on 2021-08-21)

I keep hearing of people who "lost all their Bitcoin in a boating accident".

But if simply holding Bitcoin doesn't cost you anything -- you only pay when you convert to fiat or spend the Bitcoin -- why do they want to make everyone think they have lost their coins?

And what if they then want to spend some? Then how do they explain that "boating accident"?

**Tags:** lost-bitcoins


---

## 2 answers

### Answer by username_1 on 2021-08-21. Score: 2

If you are known to own some bitcoin, then you might be expected to pay taxes at some point in the future, according to whatever tax laws you are subject to.

But if you outright lose your coins, then you probably won't be expected to pay those taxes anymore, as you 'won't be able to spend the coins in the future'.


---

### Answer by username_2 on 2021-08-21. Score: 1

This is more of a frame-challenge than a direct answer:

> you only pay when you convert to fiat or spend the Bitcoin

I don't think it's nearly that clear. For the longest time, there was little to no official guidance on how Bitcoin would be classified as well as what sort of documentation and reporting would be required. Even now as regulators are starting engage with the subject, many governments have vastly diverging views on how Bitcoin should be regulated—in some countries you even get differing guidance from various institutions of the same government.


---

