Tax Center
Prediction market guides.
Plain-English answers for Kalshi and Polymarket traders: how a year is taxed, what to file, and where to find each venue’s pages.
12 guides3 topicsLast updated October 25, 2026
Start here
Three reads cover most years.
- 01Prediction Market Taxes: How Prediction Markets Are Taxed New to this: the three treatments, in plain English
- 02How to File Kalshi Taxes (2026): Step by Step Filing this year: the forms, the export, and what it leaves out
- 03Are Prediction Market Losses Tax Deductible? What You Can Claim Down on the year: what a loss can be worth
How the tax works7 guides
How the tax works.
The three treatments, what a loss is worth, the 90% limit, amending, and keeping track of your trades.
Three ways a year can be filed
- Standard capital
- Form 8949 · Schedule D
- Section 1256
- Form 6781
- Gambling
- Schedule 1 · Schedule A
No IRS guidance settles which one applies to an event contract.
- Prediction Market Capital Gains and Form 8949 Filing Kalshi and Polymarket trades as capital gains: one Form 8949 row per closed position, settlement as a sale, the $3,000 loss limit and the carryforward.
- How to Fill Out Form 6781 for Event Contracts A filled Form 6781 Part I for a Kalshi and Polymarket year: the 60/40 split on lines 8 and 9, the December 31 mark, and the box D loss carryback.
- Are Prediction Market Losses Tax Deductible? What You Can Claim It depends on how you report. Capital and Section 1256 losses can offset other income; gambling losses only offset winnings. The three loss paths, the Section 1256 carryback, and what a losing year is worth.
- OBBBA 90% Gambling-Loss Limit Under §165(d) From tax year 2026 the OBBBA caps the gambling-loss deduction at 90% of losses, so a year where winnings equal losses can leave 10% of the losses taxable. How §165(d) now works.
- How to Amend a Tax Return for Prediction Market Losses You can amend up to three prior years on Form 1040-X to claim Kalshi and Polymarket losses you never deducted. The §1256 carryback is a different, narrower move.
- How to Track Prediction Market Trades for Taxes Keeping clean Kalshi and Polymarket records for tax season: what to track, how to pull your trade history, and the record-keeping mistakes to avoid.
Gambling or not3 guides
Gambling or not.
Why the gambling question decides the tax, what the courts have said, arbitrage, and what bettors get wrong.
Swaps or bets? The appeals courts
- Third CircuitKalshiEX v. Flaherty
- April 6, 2026
- Ninth CircuitKalshiEX v. Assad
- August 28, 2026
Both rulings are about state gaming law. Neither decides how a trade is taxed.
- Arbitrage Betting Taxes: How Profits Are Taxed Arbitrage profits are taxable, but how depends on the facts: gambling income, a Schedule C business, or possibly Section 1256 capital, and that decides the bill.
- What Bettors Get Wrong About Taxes The most common tax mistakes sports bettors and prediction-market traders make (from "no 1099 means nothing to report" to neglected records) and what to do instead.
Filing by venue1 guide
Filing, venue by venue.
What a venue sends you, what it leaves out, and how to build the rest.
By venue
Venue by venue.
How to file, the forms each venue sends, its fees and where it is legal, on each venue’s own pages.
What Kalshi sends you
- 1099-INT
- Interest Kalshi paid you
- 1099-MISC
- Credits and rewards
- 1099-B
- Crypto transfers only
- 1099-DA
- Digital assets, via ZeroHash
- Your contract profit or loss
- No form
Each form goes only to members above an IRS reporting threshold. From Kalshi's help center, checked October 25, 2026.
Also in the Tax Center
Run your own numbers.
Calculators for a quick estimate, the overview, and how we check what we publish.
Calculators
Estimate your year before you connect anything.
Price your year three common ways.
Your estimate is free. Forms for tax year 2026 open for filing in 2027.