Trading on Both Kalshi and Polymarket? How the Two Combine on One Tax Return

Kalshi and Polymarket go on the same return, and a loss on one can offset a gain on the other. How much it offsets depends on the tax method. Under capital gains the two net dollar for dollar. Under gambling, only 90% of the losses count from 2026, and only if you itemize. Under Section 1256, only the Kalshi side gets the 60/40 split.

Do Kalshi and Polymarket go on the same return?

Yes. Your tax is figured on your whole year, not app by app. It’s easy to report only the app you think of as the “real” one. Kalshi sends no 1099 for trading profit, and polymarket.com sends no tax forms at all, so nothing reminds you of either. If you report a $6,000 Kalshi profit and forget an $8,000 Polymarket loss, you pay tax on a year in which you lost money.

How does a year on both apps work out?

Say your winning days on Kalshi added up to $20,000 and your losing days to $14,000, a $6,000 profit. On polymarket.com your winning days came to $10,000 and your losing days to $18,000, an $8,000 loss. Overall you lost $2,000. Made-up numbers, fees left out.

Same trades, same $2,000 loss, and the taxable result runs from minus $2,000 to $30,000. That spread is why the method matters more than any single trade.

How do the two combine under capital gains?

Each closed position is a line on Form 8949. Kalshi and Polymarket US closes go in box C (a year or less) or box F (longer). polymarket.com closes go in box I or box L, the digital-asset boxes the IRS added with the 2025 form. The boxes keep the apps apart, and Schedule D adds them together. If the year nets to a loss, up to $3,000 comes off your other income ($1,500 if married filing separately), and the rest carries forward.

How do they combine under gambling rules?

Section 165(d) doesn’t care which app a wager was on. All your wagering for the year pools: Kalshi, Polymarket, and any sportsbook or casino bets too. Winnings go on Schedule 1, line 8b. Losses go on Schedule A, and from 2026 only 90% of them count, capped at your winnings. How the 90% rule works.

Why does only one side get 60/40?

Section 1256 needs a regulated futures contract on a qualified exchange. Kalshi and Polymarket US are CFTC-regulated, so the argument exists for them, and it is disputed. polymarket.com isn’t, so it can’t use Section 1256 at all. Why the venue matters.

Under this method the Kalshi result goes on Form 6781, split 60% long-term and 40% short-term, and polymarket.com goes on Form 8949 as ordinary capital gains. Both flow to Schedule D and net there. In the example, the Kalshi $6,000 becomes $3,600 long-term and $2,400 short-term, and the $8,000 Polymarket loss is short-term, so the year still nets to a $2,000 loss.

Can you pick a different method for each app?

The IRS hasn’t said how any of these trades are taxed, so there is no rule written for this. Our read: use one method for all your event contracts in a year. Section 1256 is the one place the split is forced on you, because polymarket.com can’t qualify. Choosing capital gains for the app that won and gambling for the app that lost is a return that invites questions. Talk to a preparer before you mix.

What should you do?

• Download your full history from every app you used this year, including ones you stopped using.
• Keep polymarket.com separate from Polymarket US. They are different venues with different forms.
• Add sportsbook bets to the picture if you might file under gambling, since they pool.
• Work out the year under each method before you pick one.

How does WagerMints put them together?

WagerMints takes your Kalshi export and your Polymarket wallet address in one report, and shows the combined year under all four federal methods side by side, with polymarket.com kept out of 60/40. It’s free to run. For the full picture of how the methods differ, see the prediction market tax guide, or how to report each method.

Questions about Kalshi and Polymarket on one return

General information about US tax, not tax or legal advice.