CoinbaseTaxes

Coinbase prediction market taxes: event contracts held in a futures account

As of October 25, 2026, there is no IRS guidance on how event contracts are taxed. What sets a Coinbase prediction contract apart from Coinbase crypto: it is a CFTC-regulated event contract, on markets operated by Kalshi, a CFTC-regulated exchange, and carried in a futures account by Coinbase Financial Markets. Coinbase’s crypto tax documents describe crypto sales and the USDC that can pay for a contract; none of them names the contract.

By Owen Monagan, Founder & CEOUpdated October 25, 2026Facts as of October 25, 2026

Coinbase prediction markets at tax time

Checked October 25, 2026

Who offers it: Coinbase Financial Markets, Inc. (CFM)
Exchange: Kalshi, which operates the markets and determines each result
Futures accounts: Kept by Coinbase Financial Markets, a futures commission merchant registered with the CFTC and a member of the NFA
Tax form for prediction markets: Not named: Coinbase’s tax pages do not mention prediction markets or event contracts
Fees: A fee breakdown on the order confirmation page; the help articles publish no schedule
A year-end position statement: Coinbase has not published one: the help pages name the daily statement as the official record

How are Coinbase prediction markets taxed? The three common ways people file.

Of the people we’ve seen file, these are the most common ways they file. Each takes the same Coinbase year to different forms.

Coinbase pays $1 per winning contract, minus fees, and $0 per losing one; a gain or loss counts when the contract settles or is sold. The table runs one worked year through each route: a single filer with $150,000 of taxable income and a $328,092 net gain, then the same filer with a $34,000 net loss.

	Standard capital	Section 1256	Gambling
Forms	Form 8949 and Schedule D	Form 6781, then Schedule D	Schedule 1 for winnings, Schedule A for losses
A gain	Short-term if held a year or less, long-term if longer	60% long-term and 40% short-term, however long it was held	Ordinary income, with losses kept apart
Open at December 31	Counts in the year it closes	Treated as sold at its fair market value on the last business day	Counts in the year it closes
A net loss	Up to $3,000 a year against other income; the rest carries forward	The same $3,000 and carryforward, or a carryback by election	Only when itemizing, at 90% from 2026, and only up to winnings
Federal tax on a $328,092 gain	$78,742	$61,025	$89,205
A $34,000 net loss	Worth an estimated $8,160 at the 24% bracket, $720 a year for 12 years	The same, or sooner against Section 1256 gains reported in the prior three years	Nothing, with no winnings to offset

Worked year: single filer, $150,000 of taxable income before the gain, the gain held short-term, flat marginal rates at that income and no bracket stacking, federal income tax before the net investment income tax. Gambling assumes $764,046 won and $435,954 lost, itemized. The loss row assumes no other capital gains. Figures from Realize’s tax engine; federal only.

Coinbase standard capital: a Form 8949 row per position

For people who file under standard capital, each contract is reported as a capital asset: every closed position is a row on Form 8949, and a settlement is a sale at its payout. A net capital loss offsets other income up to $3,000 a year under §1211(b). Filing event contracts as capital gains works the rows.

Section 1256: what people filing this way point to on Coinbase

For people who want to file under Section 1256 because of the 60/40 split, here is what that involves. Every gain or loss is split 60% long-term and 40% short-term, and a contract still held at year end is “treated as sold for its fair market value on the last business day” (§1256(a)(1)). What they point to is the instrument: §1256(g)(7)(B) counts “a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission”, and Kalshi’s exchange was designated a contract market by the CFTC on November 4, 2020. On Coinbase, the contract sits in a futures account kept by Coinbase Financial Markets, a futures commission merchant registered with the CFTC and a member of the NFA. CFM’s agreement covers futures contracts or event contracts cleared through any derivatives clearing organization.

What is cited against it: the definition list in §1256(b)(1) names no event contract, and the carve-out in §1256(b)(2)(B) excludes swaps and any “similar agreement”. The lines go on a filled Form 6781, Part I, lines 8 and 9.

Coinbase gambling route: Schedule 1, Schedule A and the 90% limit

Gambling treatment reports winnings on Schedule 1 and deducts losses on Schedule A, only when itemizing and only up to wagering gains (§165(d)). For tax years beginning after December 31, 2025, 90% of those losses count, still capped at wagering gains (Public Law 119-21, §70114), so someone who wins and loses the same amount pays tax on 10% of it.

Futures accounts: Kept by Coinbase Financial Markets, a futures commission merchant registered with the CFTC and a member of the NFA
What the CFM account carries: Futures contracts or event contracts cleared through any derivatives clearing organization
Exchange: Kalshi, which operates the markets and determines each result
Settlement: Generally in cash upon expiration, under the listing exchange’s and clearinghouse’s rules

Crypto rules

Where Coinbase’s crypto tax rules reach, and where they stop.

The crypto side of a Coinbase account has its own form and its own documents. They describe coins and USDC; none names the contract.

Form 1099-DA is for US customers with gross proceeds from sales or exchanges of crypto assets. Coinbase’s 1099-DA page counts crypto-to-fiat exchanges, such as converting Bitcoin to USD, as a sale. On what it reports, Coinbase says proceeds only for tax year 2025, with cost basis added from tax year 2026. Crypto tax guides about Coinbase also cover cost-basis methods for selling coins and wash sales. All of it is about assets in the spot account kept by Coinbase Inc. Coinbase’s prediction pages place the contract in the CFM futures account, and none of these crypto documents names it.

For people who file under Section 1256, what they point to is the exchange: Kalshi is a designated contract market, and the route’s year-end mark-to-market values a contract still open at its fair market value on the last business day of the year. No crypto form plays a part in either. How the same routes read for an account held at Kalshi directly is in Kalshi taxes.

The USDC is where the two meet: contracts can be bought with it. For that purchase, Coinbase has not published whether it is a sale of USDC, which transaction type records it, or how it is reported. The detail, with the transaction type Coinbase’s API uses for futures, is in Coinbase tax forms.

1099-DA: For US customers with gross proceeds from sales or exchanges of crypto assets
A sale for Form 1099-DA: Crypto-to-fiat exchanges, such as converting Bitcoin to USD
Form 1099-DA contents: Coinbase says proceeds only for tax year 2025, with cost basis added from tax year 2026
Trading fees in tax reports: US trading fees are included in cost basis and subtracted from proceeds
Buying a contract with USDC: Coinbase has not published whether it is a sale of USDC, which transaction type records it, or how it is reported

Fees

Coinbase prediction market fees, in Coinbase’s documents and in one year.

Coinbase describes fees but publishes no schedule for prediction contracts.

Coinbase shows a fee breakdown on the order confirmation page; the help articles publish no schedule. The CFM agreement lists exchange, regulatory and self-regulatory fees, plus CFM’s commissions at rates specified on the Coinbase site. The payouts article sets the payout at $1 per winning contract, minus fees, and $0 per losing one, and defines profit as payout minus purchase cost, minus any fees. Read together, the two lines leave open whether a fee is taken when the contract is bought, when it settles, or both.

One Coinbase year, with illustrative fees

Coinbase’s own example: 10 Yes contracts at $0.40 cost $4.00 and collect $10.00 if the event occurs. The year below adds a fee on each purchase and a second, losing trade. The fee amounts are illustrative, since Coinbase publishes none, and the example assumes no fee at settlement.

Trade	Cost	Fee	Payout	Result
10 Yes at $0.40, event occurs	$4.00	$0.20	$10.00	$5.80
15 Yes at $0.20, event does not occur	$3.00	$0.15	$0.00	−$3.15
The year				$2.65

Result is payout minus cost minus fee, Coinbase’s own profit formula. Fees are illustrative.

Coinbase’s general tax page says, of its own reports, that US trading fees are included in cost basis and subtracted from proceeds; its prediction pages do not say. For people who count the fee in each position’s cost or proceeds, on Form 8949 the first trade is a $5.80 gain and the second a $3.15 loss; on Form 6781 the year is one $2.65 net; as gambling, the $5.80 is a winning and the $3.15 a loss, kept apart.

Fees: A fee breakdown on the order confirmation page; the help articles publish no schedule
Fees in the CFM agreement: Exchange, regulatory and self-regulatory fees, plus CFM’s commissions at rates specified on the Coinbase site
Payout: $1 per winning contract, minus fees, and $0 per losing one
Profit, as Coinbase defines it: Payout minus purchase cost, minus any fees
Coinbase’s example: 10 Yes contracts at $0.40 cost $4.00 and collect $10.00 if the event occurs

December 31

Positions open at December 31 on Coinbase.

Only one route values a contract that is still open when the year ends.

Coinbase has not published a year-end position statement: the help pages name the daily statement as the official record. Under the CFM agreement, event contracts require the maximum possible loss to be fully secured in advance, and they are “generally settled in cash upon expiration”.

Under standard capital and gambling treatment, a contract open at December 31 counts in the year it settles or is sold. Section 1256 treats it as sold at its fair market value on the last business day of the year, which needs a year-end value Coinbase’s documents do not supply. The daily statements show what settled and when; how to file Coinbase prediction market taxes puts them in order.

A year-end position statement: Coinbase has not published one: the help pages name the daily statement as the official record
Official record: The daily statement, which in-app history can briefly lag
Collateral: Event contracts require the maximum possible loss to be fully secured in advance
Settlement: Generally in cash upon expiration, under the listing exchange’s and clearinghouse’s rules

Crypto-price contracts

BTC and ETH 15-minute contracts: a crypto underlying, not a crypto instrument.

A contract on the price of bitcoin is still an event contract.

Coinbase’s payouts article says BTC 15 min and ETH 15 min contracts resolve on the CF Benchmarks Real Time Index (BRTI). The contract pays a dollar or nothing on where that index lands. No coin is bought or sold inside the contract, and it is reported the same way as a contract on an election or a game: under whichever of the three routes is used for the year.

Crypto-price contracts: BTC 15 min and ETH 15 min contracts resolve on the CF Benchmarks Real Time Index (BRTI)

Guides

Guides for a Coinbase prediction-market year.

The mechanisms behind each route, worked on prediction-market trades.

Prediction market capital gains and Form 8949One Form 8949 row per closed position, the $3,000 loss limit and the carryforward.
The Section 1256 60/40 ruleThe 60/40 split, the year-end mark and the three-year loss carryback.
Form 6781 for event contractsA filled Form 6781 Part I, lines 8 and 9, and the box D carryback.
Prediction markets taxed as gamblingSchedule 1 winnings, itemized losses and the 90% limit from 2026.

Sources14 documents

Where each fact comes from.

Every figure above links to one of these, read on the date shown.

Price your Coinbase prediction-market year three common ways.

Enter your Coinbase prediction-market net for a federal range under each common route.

Calculate your taxes