WagerMintsLost money on Kalshi or Polymarket? Here is what the loss is worth
Last reviewed October 27, 2026
Every position that made money this year.
Every position that lost money, as a positive number.
Net result: -$30,000. Federal tax this year from this trading, at 24%:
Capital gainslowest
$3,000 of the loss comes off other income at 24%. $27,000 carries forward to later years.
saves $720
Ordinary income
Whether a net loss reduces other income depends on your facts, such as trader status.
Depends
Gambling
$20,000 winnings at 24%, losses count for nothing without itemizing.
$4,800
Section 1256 (60/40)lowest
$3,000 off other income this year, or carry the loss back 3 years against past 60/40 gains. $27,000 carries forward to later years.
saves $720
The gap between the cheapest and the most expensive method is $5,520 of federal tax, for the same trades.
A rough estimate at one bracket rate, for this trading only. It leaves out the standard deduction effect, state tax and other income. Your own trades give the real numbers.
What a loss is worth under each method
- Capital gains: up to $3,000 a year comes off your salary or other income ($1,500 if married filing separately). The rest carries forward with no time limit and wipes out future capital gains in full.
- Ordinary income: whether a net loss reduces other income depends on your facts, including whether your trading counts as a business. Ask a preparer.
- Gambling: losses only count if you itemize, and only against gambling winnings. From 2026 only 90% of them count. On the standard deduction, a losing year can still leave you owing tax on your winning trades.
- Section 1256: the same $3,000 a year, plus an election to carry the loss back three years against Section 1256 gains you paid tax on. Only for CFTC-regulated exchanges such as Kalshi, never polymarket.com.
Losses from an earlier year
If you didn’t report a past loss, you can usually amend that year’s return within three years of filing it. A carryforward you never used can also still be claimed. How losses work, method by method.
Your state may not allow it
Several states don’t allow gambling losses at all, even if you itemize. Check your state. Had a winning year instead? What you keep from a win.
See your own year four ways
Load your Kalshi export or polymarket.com wallet into WagerMints to see your actual loss under each method, the carryforward, and the forms. Free to run.
Run your report