Kalshi Tax Calculator

Why Kalshi Taxes Are Different

Kalshi operates as a CFTC-designated contract market (DCM). Its event contracts are legally classified as binary options on regulated exchanges. This creates a plausible argument for Section 1256 treatment — the same favorable tax treatment that futures traders receive.

Under Section 1256, 60% of your gains are taxed at the long-term capital gains rate (max 20%) and 40% at short-term rates — regardless of how long you held the position. For a trader in the 32% bracket, this can mean thousands in savings compared to ordinary income treatment.

Kalshi is CFTC-regulated, making a strong case for Section 1256 treatment. 60% of gains are taxed at long-term rates, 40% at short-term — even if you held for one day.

Form: Form 6781

Each position treated as a capital asset sale. Short-term (under 1 year) or long-term rates apply. Most Kalshi trades are short-term.

Form: Form 8949 + Schedule D

Net P&L reported as other income on Schedule 1. Simple approach, but taxed at your full marginal rate.

Form: Schedule 1

Report gross winnings as gambling income. Losses deductible only if you itemize, capped at 90% under OBBBA starting 2026.

Form: Schedule 1 + Schedule A

Connect Kalshi

Enter your Kalshi credentials or upload a CSV export. We import all fills and settlements automatically.

Review your P&L

See per-position profit & loss, win rate, and holding period breakdown.

Compare methods

See the exact dollar difference between all 4 tax treatments for your Kalshi trades.

Download forms

Get IRS-ready Form 8949, Schedule D, or Form 6781 — pre-filled with your data.

Does Kalshi Send a 1099?

Kalshi issues Form 1099-B to traders who meet the IRS reporting threshold. This form reports gross proceeds from your trades but does not calculate your cost basis or net profit. You're responsible for calculating your actual gain or loss using your trade history.

Even if you don't receive a 1099, you are still required to report all prediction market gains and losses on your tax return. The IRS matches 1099 data against filed returns, so underreporting can trigger notices.

Our calculator imports your complete Kalshi trade history and computes your cost basis using FIFO (first-in, first-out), matching exactly what you need for IRS forms regardless of whether Kalshi's 1099 matches.

Section 1256 and Kalshi: What Traders Need to Know

Section 1256 of the Internal Revenue Code provides favorable tax treatment for certain regulated futures contracts. Under this provision, gains are split 60% long-term / 40% short-term regardless of actual holding period. For traders in higher tax brackets, this can produce significant savings.

Kalshi is the only CFTC-designated contract market (DCM) for event contracts in the United States. This regulatory status creates the strongest argument among all prediction market platforms that trades may qualify as “regulated futures contracts” under Section 1256.

However, the IRS has not explicitly confirmed that event contracts on Kalshi qualify for Section 1256. Some tax professionals argue that binary options on a DCM satisfy the statutory requirements; others take a more cautious position. Our calculator shows you the exact dollar difference so you can make an informed decision with your tax advisor.

Does Kalshi send a 1099 form?

Yes. Kalshi issues Form 1099-B to traders who meet IRS reporting thresholds. The form reports gross proceeds but not your cost basis or net profit — you still need to calculate your actual gain or loss from your trade history.

Can Kalshi trades qualify for Section 1256 (60/40) treatment?

Possibly. Kalshi is the only CFTC-regulated prediction market in the U.S., which creates a plausible argument for Section 1256. However, the IRS has not explicitly confirmed this. Our calculator shows you the exact savings so you can discuss with your tax advisor.

What cost basis method is used for Kalshi trades?

We use FIFO (first-in, first-out) for all cost basis calculations. This means your earliest purchases are matched against settlements or sales first. FIFO is the IRS default method when no other method is specified.

Do I need to report Kalshi losses?

Yes. How losses are treated depends on your chosen tax method. Under capital gains, losses offset gains on Schedule D. Under ordinary income, net losses reduce taxable income. Under gambling treatment, losses are only deductible if you itemize and are capped at your winnings (90% under OBBBA starting 2026).

Can I import trades directly from Kalshi?

Yes. Enter your Kalshi email and password — we authenticate directly with the Kalshi API, import all fills and settlements, then immediately discard your credentials. You can also upload a CSV export from your Kalshi account.

Are Kalshi trades short-term or long-term?

Most Kalshi event contracts settle within days or weeks, making them short-term capital gains (held under 1 year). Under Section 1256 treatment, the holding period doesn't matter — you automatically get the 60/40 split regardless.

What if I traded on Kalshi and other platforms?

Our tool supports importing from Kalshi, Polymarket, Robinhood, DraftKings, and more. All trades are consolidated into a single P&L dashboard with unified tax calculations across platforms.

Is predictiontaxes.com a substitute for a CPA?

No. We provide tax calculations and pre-filled IRS forms, but this is not tax advice. We recommend reviewing your results with a qualified tax professional, especially if you have complex situations or want to take an aggressive position like Section 1256.