See what your Polymarket losses could be worth at tax time.

How we calculate

What we assume, and how the range works

We treat your figure as your all-time net

Polymarket US only became available to US traders recently, so a single lifetime win/loss number covers essentially your whole history on the CFTC-regulated US exchange. What a single number cannot do is split your total by tax year, and the year a loss falls in decides which return it goes on and when you collect it. Connect your account and Realize replaces this assumption with your real per-trade record, year by year.

There is no Polymarket US year-end price before 2026

Section 1256 treats a position you were still holding on December 31 as sold at that day’s price, so a past year cannot be filed without that day’s mark. Polymarket US only opened to US traders in 2026, so no earlier year has a December 31 price on it, and we will not invent one. Realize values such a position at cost, flags it as an estimate and leaves it out of the year-end mark rather than treating it as sold at a number we made up. Positions you actually closed in those years are unaffected; this reaches only what was still open at year end.

What is reportable does not depend on a form arriving

Polymarket US’s documentation carries no tax section as of September 2026, so we cannot tell you which forms, if any, you will be sent; ask the exchange. It does not change the answer: the gain or loss on your event contracts is reportable whether or not a form is issued, and the figure has to come from your own fill history either way. Realize rebuilds that history from the exchange’s own record of your trades. Polymarket US’s help documentation.

Polymarket US charges takers and pays makers

Polymarket US takes a fee from the order that crosses the spread and credits a rebate to the resting order it filled against, both scaled by the contract price, so both are largest around 50 cents. Your all-time net is therefore already net of fees and, if you rested orders, already carries rebates the exchange paid you, which are two different things inside one number. Realize reads the exchange’s own fill record, trade by trade, rather than a single net figure. Polymarket US’s fee schedule.

The range spans the lowest and highest federal brackets

A loss deduction is worth its size times your ordinary tax rate. We do not ask your income, so we show both ends: what it is worth at the 10% bracket and at the 37% bracket. Your real savings land in between, set by your income and filing status. The figure above is the lifetime total, not this year’s: capital losses cancel capital gains in full, but only $3,000 a year of what is left comes off your ordinary income, and the rest carries forward with no expiry. With no gains to offset, a $100,000 loss takes about 34 years of returns to collect in full.

What if I’m up?

Whether §1256 helps a winning year comes down to how much you make. A win is taxed as short-term (ordinary income) by default, at your regular tax rate. §1256 taxes 60% of it at the lower long-term capital-gains rate instead. As long as your ordinary rate is higher than that long-term rate, filing under §1256 lowers your bill, and the wider the gap, the more you save, which is why higher earners benefit most. If your income is low enough that the two rates are close, there is little to gain either way.

Why §1256, and the three-year carryback

We lead with §1256, the most favorable read for CFTC-regulated prediction markets like Polymarket US: gains and losses split 60% long-term and 40% short-term, whatever the holding period. These contracts almost always settle within a year, so a winning year would otherwise be taxed entirely as short-term (ordinary) gains, the 60/40 split moves 60% of it to the lower long-term rate, which saves more the higher your bracket. A losing year is even better: a net §1256 loss can carry back up to three years against prior §1256 gains for a refund, the payday. Read the full §1256 60/40 guide.

It is a strong but unsettled position

The IRS has issued no guidance on prediction-market contracts and could challenge §1256 treatment, even for years already filed. Realize shows the work and the more conservative treatment too. The final call is yours and your CPA’s.

Federal only

This estimate ignores state tax, the net investment income tax (NIIT), and any other capital activity you have. It is not tax advice.