Gambling
Gambling treatment, built from your trades.
For people who report prediction markets as gambling: every wager grouped into sessions, winnings and losses on the schedules where they go.
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1,012
386
126File- Winning sessions
- $64,880
- Losing sessions
- $46,640
- If −$18,240
- $0 off other income
DraftSessions, winnings, losses.
1. One market, one day
Each market's wagers on one day, Eastern time, net into one session.
2. Winnings, gross
Every winning session adds up on Schedule 1, line 8b. Losing sessions never reduce it.
3. Losses, itemized
Schedule A, line 16, only if you itemize, capped at winnings. From 2026, 90% of losses count.
The schedules, and the log behind them.
- Schedule 1, line 8bYour gross winnings.
- Schedule A, line 16Your loss deduction.
- Session logThe record the IRS asks gamblers to keep: every session, staked and returned.
- Session CSVThe same sessions, for your accountant.
Unsettled
Precedent, and arguments against.
Some states treat event contracts as wagering. The CFTC regulates them as derivatives, and no IRS guidance says they are wagers for tax purposes.
There is no IRS guidance for prediction markets, but all income must be reported. Realize explains the options so you can choose for yourself or with one of our licensed CPAs.
The legal record →The same year, every route.
See this year beside capital gains, ordinary income and Section 1256 before you choose.
Questions about gambling treatment
The IRS measures gambling by session, not by wager, and has not said what a session is for event contracts. Realize nets each market’s wagers on one Eastern-time day into one session.
Then no gambling loss is deducted. Winnings are still reported in full.
There is no IRS guidance either way. The guide sets out what gambling treatment does to a year beside the other routes.
Are prediction markets taxed as gambling?See your year as gambling.
Connect free. Pay when you get your forms.
Free to connect and estimate. Forms from $59.