Assuming you are in the U.S., it is not complicated. It is property so you report it as capital gains. The gain is the difference between the price you sold it for (in dollars at the time of the sale) and the price you bought it for (in dollars at the time of the purchase).
For example, if you bought it for 1.05 BTC on 2012/01/03 (I think that was his price), you paid the equivalent of $6. If you sold it today for 1.1 BTC, you sold it for the equivalent of $57,200. You pay capital gains tax on a gain of $57,194.
Considering the amounts of money involved, it would probably be best if the OP were to consult with a tax professional familiar with his specific tax and financial situation. There are many nuances in tax law.