Goat -

First - remember that I am at 7,000 ft. and we love ice and snow.  We're at a 40 inch base here.... and do take a look at how a Tesla handles ice.... you may re-think what you have..... but I digress....

Yes, there are several items surrounding a theft loss that your accountant will sort with you - typically quite quickly but always based upon your own circumstances.  It will depend on whither your bitcoins lost were part of a business, held for the prouction of income, as an investment or as a hobby.... and that it entirely dependent upon your circumstances.

Depending on the above, it may be limited to the basis or fair market value of your bitcoins - so your accountant will likely need both.  

Basis is typically what you purchased the bitcoins for or, if you do pool them, the value under the pooling convention you use (FIFO, Weighted Average, etc.).  For the fair market value of the loss make sure you bring to your accountant some exchange numbers from the likes of Bitstamp, etc. - and a chart works best as the exact 'date' your loss occurred may be as much a guess as anything.  In any event, make sure the exchange price or method you use it is the same exchange you used to value your bitcoin (if you were a miner) in the first place.

Finally, take care to explain the loss clearly.  Your accountant may ask that you file a police report or the like, to help substantiate the loss.  In bitcoin a 'loss' by theft is typically evidenced by little more than a transaction on the block chain.... so you want to think about how this loss can be documented for an agent if you are audited a year or two later who will likely not understand bitcoin. Showing that it was a theft can be a more difficult part of the process.  

As well, determining 'when' the theft occurred is many times interesting.  If you loaned the guy some coins involved in a 'test' - when did it go wrong to the point of being a loss or theft - and when did you discover it.  Did you discover it immediately or did a suspicion ripen into an certainty.  

Also, just fyi - keep in mind a gambling loss is different event than a theft loss, and I am not sure where your loss fits.  You need to be very clear here, as gambling losses are treated quite differently from a theft loss and we're talking about a good deal of money.  It may be critical what you were specifically doing - because if you are 'testing' a gambling site that, to me, is quite different from simply gambling at the site.  Testing implies there is a business going on here - either because you are in the trade or business of gaming as a gambler, or as an owner of a gaming space or location.

This is were one needs to be so cautious and clear.  Let's pretend it was 'gambling.'  The worst of all worlds could arise if the IRS said when you cashed in you effectively 'sold' your bitcoin for its the value of the account you received - a transaction where you have to recognize income and one that you may not be able to net your gambling losses agains.... and then you gambled..... an activity where your losses could be non-deductible... in short, a double whammy.  

Finally, you need to be careful to document in this space the circumstances surrounding the loss to make sure it is not colored as part of an 'illegal' activity.  It's not in the IRS Code, but there are court decisions permitting the IRS to deny the loss deduction simply because it was incurred in an activity that was illegal and 'violated public policy.'

If you want, Goat, email me - you have that info.  I am responding to this depth here so that others who are taken in this space understand that their accountant is critical in dealing with things like this.  I can't tell you where you fall in the spectrum, only the guy who knows your business can.

For that guy, this should be an easy question, they understand your circumstance and your options in how you treat and document the event.  They won't be able to give you certainty, but they will be able to give you a way to report this that is accurate and protects you best should it be questioned later..... if you need someone in the SF bay area - that's where I'm from and I can give you a lead or two......