Mark-to-market accounting for prediction markets, from every trade.
Realize is US federal tax software that rebuilds a client's Kalshi or Polymarket US year from every trade. It matches lots first in, first out with fees in basis, marks open positions at the venue's published December 31 close, and builds Form 6781, Form 8949 and a gambling session log, so you choose the treatment with the trades behind every figure.
This is the Section 1256 year-end mark, not the Section 475(f) trader election. Three treatments are in common use while the law is unsettled, and Realize prices all three.
How Realize marks to market.
Venue statements leave out per-lot basis, anything still open, and the December 31 mark Section 1256 needs. Realize rebuilds the year from every trade instead.
FIFO, lot by lot
Basis carried first in, first out, with fees and settlements included in each lot.
The December 31 mark
Open §1256 positions are marked at the venue's own published close and reopened January 1 at the same price.
Named, not guessed
A position the venue published no close for is named on the statement, never priced at a number we made up.
What you get for each client.
The same documents every paid tier builds, emailed to your client and ready to hand to you.
Transaction statement
Every trade, settlement and December 31 mark behind the forms: the list of transactions Form 6781 asks for when no 1099-B covers the contracts. Form 6781 instructions, line 1.
Form 8949
For the standard capital route, one row per lot with its holding period.
Form 6781
For the Section 1256 route, with lines 8 and 9 split 40% short-term, 60% long-term.
Gambling session log
For the §165(d) route, with the Schedule 1 and Schedule A figures behind it.
Account summary
Each position by ticker with its year-end mark. A position the venue published no close for is named, not priced.
Transaction CSV
The same rows for your spreadsheet or your tax software.
Your client pays from $59 a year; the estimate is free. Forms open for the 2026 filing season.
See pricingIs a prediction market contract a Section 1256 contract?
Section 1256 covers regulated futures and nonequity options listed on a qualified board or exchange (§1256(b), (g)(7)(B)). Kalshi and Polymarket US are CFTC-designated contract markets. Whether a yes/no event contract is a contract of that kind is untested.
No IRS guidance or court ruling addresses whether event contracts are Section 1256 contracts. Separately, federal appeals courts disagree on whether states can regulate them as gambling: KalshiEX, LLC v. Flaherty (3d Cir., April 6, 2026) and KalshiEX, LLC v. Assad (9th Cir., August 28, 2026).
Section 1256 is one way to file, not a settled one. Realize prices the year under all three treatments and leaves the choice to you and your client.
GuideWhat each court ruledThe three common treatments, with primary sources.
There's no IRS guidance on event contracts yet. Realize prices your client's year under standard capital, Section 1256 and gambling, side by side. Which one to file under is your call.
Three treatments are in common use for event contracts. Standard capital treats a contract as a capital asset under IRC §1221, reported on Form 8949, with net capital losses limited to $3,000 a year against other income under §1211(b). Section 1256 marks open positions to market at December 31 and taxes the net 60% long-term and 40% short-term on Form 6781, with a 3-year loss carryback under §1212(c). Gambling treatment under §165(d) allows wagering losses only up to winnings, and from tax year 2026 only 90% of them.
Realize is a data tool, not a tax advisor.
- §1221The definition of a capital asset, the basis of standard capital treatment
- Form 8949Where standard capital gains and losses are reported, one row per sale
- §1256The Section 1256 regime: the 60/40 long-term / short-term split and the year-end mark to market
- §1256(f)(5)The wash-sale rule does not apply to a loss from the year-end mark to market
- §1211(b)The $3,000 annual cap on net capital losses against ordinary income ($1,500 married filing separately)
- §1212(c)The elective three-year carryback of a net Section 1256 loss against prior-year Section 1256 gains
- Form 6781Where Section 1256 gains and losses are reported, and where the carryback election is made
- §165(d)The wagering-loss limitation, capped at 90% of losses for tax years beginning after December 31, 2025
- Pub. L. 119-21 §70114The One Big Beautiful Bill Act provision that amended §165(d) to the 90% limit
How it works with your clients.
- 01Your client
Connects read-only.
Your client creates a free account and connects Kalshi or Polymarket US with a read-only key. No trading endpoint, no custody of funds.
- 02Realize
Rebuilds the year.
Every trade, fee and settlement for tax years 2023 through 2026, priced under all three treatments.
- 03You
Choose and file.
Your client shares the statement and the documents for all three routes: Form 8949, Form 6781, the gambling session log, plus the summary and CSV. You pick standard capital, Section 1256 or gambling, and file.
Traders who want advice need a CPA. That could be you.
Through our Forms + CPA tier, Realize refers traders to CPAs we approve of, after a call with our team. Each referral arrives with the trader's full transaction file already built.
Questions from tax pros.
Every position still open on December 31 counts as sold at that day's close and reopens January 1 at the same price. Realize reads the close from the venue's own published history. A position the venue published no close for is named on the statement, never priced.
You and your client do. Realize prices the year under all three treatments and shows its work, but it doesn't recommend one or give tax advice.
Yes. Every file ships with a transaction CSV with the same rows as the statement, for your spreadsheet or tax software.
Kalshi and Polymarket US, for tax years 2023 through 2026.
No. On the Forms tier, Realize builds the documents but doesn't file or review them. On Forms + Filing, our filing partner is the preparer.
Give your clients the December 31 mark Section 1256 needs.
Send a client the free estimate, or talk to us about your firm.