WagerMintsWon on Kalshi or Polymarket? Here is what you keep
Last reviewed October 27, 2026
Every position that made money this year.
Every position that lost money, as a positive number.
Net result: $10,000. Federal tax this year from this trading, at 24%:
Capital gains
$10,000 short-term gain at 24%.
$2,400
Ordinary income
$10,000 at 24%.
$2,400
Gambling
$30,000 winnings at 24%, losses count for nothing without itemizing.
$7,200
Section 1256 (60/40)lowest
60% at 15% and 40% at 24% on $10,000.
$1,860
The gap between the cheapest and the most expensive method is $5,340 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 win costs under each method
- Capital gains and ordinary income: your net profit at your ordinary rate, since nearly every position is short-term.
- Gambling: every winning trade counts as income, and losses only come off if you itemize. A net win of $10,000 can mean $30,000 of gambling income.
- Section 1256: 60% at the long-term rate, which is usually the cheapest. CFTC-regulated exchanges only.
The rates themselves: the 2026 bracket table.
Nothing is withheld, so set some aside
Kalshi and Polymarket don’t withhold tax. After a big winning year you may owe estimated tax during the year, not just in April, or face an underpayment penalty. When you are actually taxed.
Positions still open on December 31
Under three of the methods an open position isn’t taxed until you close it. Section 1256 is the exception: it treats open positions as sold at their year-end price. Lost money instead? What a loss is worth.
See your own year four ways
Load your Kalshi export or polymarket.com wallet into WagerMints for your exact bill under each method and the forms filled in. Free to run.
Run your report