Prediction marketsEvery venue
Prediction markets: taxes, forms, fees and legal status by venue
As of October 23, 2026, Realize has sourced guides for two prediction markets, Kalshi and Polymarket. This page puts the venues side by side: what each one sends at tax time, what it costs to trade, and where state courts and regulators have acted. Each row links to the venue’s own guide, which holds the full answer and its sources.
By Owen Monagan, Founder & CEOUpdated Checked October 23, 2026
Prediction markets at a glance
Checked October 23, 2026- Venues with guides
- Kalshi and Polymarket
- Legal status checked
- October 23, 2026
- IRS guidance on event contracts
- None issued
Venues2 venues
Which prediction markets can US traders use?
The exchanges Realize has written guides for, and who runs each one.
| Venue | Who runs it | Regulator | Guides |
|---|---|---|---|
| Kalshi | KalshiEX LLC | A CFTC designated contract market | 11 guides |
| Polymarket | QCX LLC d/b/a Polymarket US | A designated contract market and clearing organization under CFTC oversight | 4 guides |
Side by side: Kalshi vs Polymarket.
Tax forms
What does each venue send at tax time?
The forms each venue says it issues, and whether any of them reports the profit or loss on your contracts.
| Venue | Tax forms | Contract profit or loss | P&L statement |
|---|---|---|---|
| Kalshi | 1099-INT1099-MISC1099-B1099-DA | No form reports it | Yearly, first in first out; the help center says it updates the first morning of each month |
| Polymarket | None documented: no page of the docs mentions a 1099, a W-9 or the IRS | – | – |
Where no form reports your trades, the year’s result comes from the venue’s own trade history. What each export covers: Kalshi trade history and exports.
How it’s taxed
How is a prediction market year taxed?
A summary. The full walk-through, with one year priced each way, is in the prediction market taxes guide.
There is no IRS guidance on how event contracts are taxed. Of the people we’ve seen file, these are the most common ways they file: standard capital treatment on Form 8949 and Schedule D; Section 1256 on Form 6781, with its 60/40 split and a December 31 mark on open positions; and gambling treatment, with winnings on Schedule 1 and losses deductible only by people who itemize.
Prediction market taxes puts the same year through each route, and the prediction market tax calculator prices your own net all three ways.
Legal status
Where are prediction markets legal?
The states where a court or regulator has acted, counted from each venue’s state-by-state status, with the date it was checked.
| Venue | States by status | Checked |
|---|---|---|
| Kalshi | Switched off: 3; Ordered, on hold: 1; Being fought: 17 | Oct 23, 2026 |
| Polymarket | Switched off: 1; Case pending: 9 | Oct 21, 2026 |
| Robinhood | Sports stopped by agreement: 2; Case pending: 9 | Oct 23, 2026 |
The prediction market legal status by state map puts every venue’s states side by side. A state order about gambling or gaming law is not a ruling on how a trade is taxed.
Fees
What does it cost to trade?
How each venue charges, from its own fee documents, with the guide that works the formula.
| Venue | Charge | How it’s set | Guide |
|---|---|---|---|
| Kalshi | Fees | A transaction fee on each trade’s expected earnings | Kalshi fees, with a calculator |
| Polymarket | Taker fee | 0.0695 x C x p x (1 - p), at most $1.74 per 100 contracts at 50¢; 0.10 in table tennis markets, at most $2.50 per 100 at 50¢ | Polymarket US fees |
Sports betting
How do prediction markets and sports betting differ for taxes?
A sportsbook bet has settled rules. An event contract has none from the IRS.
A sportsbook payout is gambling income: the IRS treats winnings as fully taxable and lets losses come off only on Schedule A. From tax year 2026, IRC §165(d) limits the deduction to 90% of wagering losses. Whether an event contract is a wagering transaction at all has no IRS answer. Of the people we’ve seen file, gambling treatment is one of three common routes.
Sports betting taxes covers the W-2G, withholding and the loss rules. Where the two meet: are prediction markets taxed as gambling? and the 90% gambling-loss limit.
Guides4 guides
Read further.
How each common treatment works, and a filled Form 6781 for an event-contract year.
- What Is the Section 1256 60/40 Rule? Section 1256 contracts get a blended 60% long-term / 40% short-term rate, mark-to-market and a loss carryback. Why it may matter to prediction-market traders.
- 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.
- Are Prediction Markets Taxed as Gambling? No IRS guidance says Kalshi or Polymarket contracts are wagering. What gambling treatment costs, how it compares with capital and Section 1256, and whose call it is.
- 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.
Sources10 documents
Where each fact comes from.
Every figure above links to one of these, read on the date shown.
- CFTC Designates KalshiEX LLC as a Contract Market Checked October 8, 2026
- Kalshi Help Center: How is Kalshi regulated? Checked October 8, 2026
- Kalshi Help Center: What tax documentation does Kalshi provide? Checked October 8, 2026
- Kalshi Help Center: Fees Checked October 8, 2026
- CFTC Industry Filings: QCX LLC d/b/a Polymarket US (DCM) Checked October 22, 2026
- Polymarket US docs: What is Polymarket US? Checked October 22, 2026
- Polymarket US documentation, every page (sitemap) Checked October 22, 2026
- Polymarket US docs: Fee Schedule Checked October 21, 2026
- IRS Topic No. 419, Gambling income and losses Internal Revenue Service · Checked October 21, 2026
- 26 U.S. Code § 165(d), Wagering losses, with amendment notes Legal Information Institute, Cornell Law School · Checked October 21, 2026
See your year priced three ways.
Connect your prediction market accounts for a free estimate under each treatment.