WagerMintsHow we check our numbers
Last reviewed October 24, 2026
Two different kinds of correct
Every WagerMints report does two jobs, and they are checked in different ways.
- The arithmetic. Which buy closed against which sale, what each cost, what it sold for, how long you held it. This is pure math, and it is either right or wrong. We test it to the cent.
- The tax rules. How a gain is treated under each of the four methods. The arithmetic of each rule comes straight from IRS instructions and can be checked. But whether a method is allowed for event contracts at all is unsettled law, and no test can settle it. We label that openly instead of hiding it.
The rules that never bend
These hold on every report, and the test suite fails if any one of them breaks:
- No cent created or lost. The cost basis that comes out of a position equals exactly what went in: price times quantity plus the buy fee.
- One starting point. Capital, ordinary and Section 1256 all start from the same net realized gain. If they disagree, the matching is broken.
- A payout is not a profit. When a contract settles, the taxable amount is the payout minus what you paid, never the gross payout. Generic crypto tools get this wrong more often than you would think.
A worked example you can do with a calculator
Buy 100 YES contracts at 40¢ on January 10, 2026, paying a $0.70 fee. The market settles YES on March 14 and pays $1 per contract.
- Cost basis: 100 × $0.40 + $0.70 = $40.70. Fees go into basis, per the Form 8949 instructions.
- Proceeds: 100 × $1.00 = $100.00.
- Gain: $59.30, held 63 days, so short-term.
Run that trade through WagerMints and you get the same three numbers.
The golden tests
Hand-worked cases like that one are written into a test suite, each asserting the exact answer and naming the IRS source it checks. A few of them:
| Method | Input | Expected taxable amount | Checks |
|---|---|---|---|
| Capital | −$5,000 net | −$3,000 (loss capped) | §1211(b), Schedule D line 21 |
| Gambling | +$100 and −$40, same day | $60 (a session nets within the day) | §165(d) |
| Gambling | +$100k / −$100k in 2026, itemizing | $10,000 (the 90% cap) | §165(d) as amended in 2025 |
| Gambling | Same, not itemizing | $100,000 (no loss deduction) | IRS Topic 419 |
| Section 1256 | +$1,000 net, held one day | $600 long-term / $400 short-term | §1256(a)(3), Form 6781 |
In total the engine runs more than 300 automated tests, from these golden cases to deliberately broken inputs written to trip it up.
Checked against real exports
- Kalshi’s own P&L file. When you give us both Kalshi exports, we rebuild your realized gains from the individual fills and reconcile them against Kalshi’s own realized-P&L file. On our test account the two match position for position.
- Real Polymarket wallets. We run the engine over public wallets with thousands of trades to catch formats and edge cases a hand-made test would never think of.
- Stress tests. Exports up to 50,000 rows, malformed files and random inputs. A file that is too big or broken gets a plain-English error, not a wrong number.
When we don’t know, we say so
The engine is built to warn rather than guess. A sale with no matching buy, a market that was voided, a position still open on December 31, reward income that sits outside your trades: each one gets a named warning in your report instead of a quiet assumption baked into a total.
No CPA firm has reviewed the WagerMints engine. We have prepared the review packet: what the engine does, the tests above, and the specific judgment calls we want a professional to sign off on, such as how a gambling “session” should be defined for a market that never closes. When a review happens we will name the firm and publish what they checked and what they changed.
Until then, treat our method labels as exactly that: our reading of the sources, shown with the sources, for you and your preparer to judge.
Want the rules behind each method in plain English? Start with the guide to the four methods.
See your own year four ways
WagerMints prices your Kalshi or Polymarket year under all four federal treatments, side by side, with the work shown and the forms filled. Free to run.
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