Tax Year
The 12-month period (Jan 1 – Dec 31) for which you file a return. Disposition date determines the year.
The tax year for most individuals is the calendar year: January 1 through December 31. Gains and losses from prediction markets are assigned to the tax year in which the disposition occurs.
Key rule: disposition date, not purchase date
If you buy shares in November 2024 but the market settles in February 2025, the gain or loss goes on your 2025 return. The purchase date is only used for calculating the holding period (short-term vs. long-term) and the cost basis.
Year-end considerations
- Open positions: Not taxable under most methods (except Section 1256 mark-to-market)
- December settlements: Check the exact date — a December 31 settlement is 2024 income, January 1 is 2025
- Loss harvesting: Some traders sell losing positions before year-end to lock in losses for the current tax year
Calculate your prediction market taxes
Import trades from Kalshi, Polymarket, Robinhood & more. See your P&L and compare tax methods — free.
Import Trades →Free · No account required
Related Terms
Why traders trust us
IRS-compliant forms
Form 8949, Schedule D, Form 6781
All 4 tax methods
Compare side-by-side with real numbers
FIFO cost basis
IRS default, calculated automatically
No data stored
Everything runs in your browser
Calculate your taxes
Import trades from Kalshi, Polymarket, Robinhood & more. Free P&L + tax comparison.
Import Trades →Free · No account required
Supported Platforms