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See what your Kalshi losses could be worth at tax time.

Most Kalshi traders never claim their losses. Because Kalshi contracts get §1256 treatment, a losing year can offset your capital gains and up to $3,000 of ordinary income — every year until it’s used up. Plug in your numbers for an instant estimate.

Quick estimate

Estimate — not tax advice

$

W-2, 1099, household — whatever shows up on line 11.

Sets your bracket and the loss cap ($1,500 if married filing separately).

$

Net losing year on Kalshi / Polymarket. We'll find the exact number when you connect.

Estimated federal tax savings

$720

  • Off your income this year, at your 24% rate$720

Your $20,000loss doesn’t expire — it offsets future capital gains in full first, then up to $3,000/yr against other income, carrying forward indefinitely until it’s used. What you pocket is that deduction times your rate, not the loss itself. Spent purely against income it’d take roughly 7 years— a projection that assumes no offsetting gains and the same bracket. §1256 and standard capital-loss treatment both land near $720 this year; §1256’s extra lever — the three-year loss carryback — pays off if you had a winning year (add one above).

We lead with §1256(the 60/40 split and the three-year loss carryback) — the most favorable read for CFTC-regulated prediction markets like Kalshi. It’s a strong but unsettledposition: the IRS has issued no guidance and could challenge it, even for years already filed. Realize shows the work and the more conservative treatment too — the final call is yours and your CPA’s.

Federal estimate only. Ignores state tax, other capital activity, and NIIT. Not tax advice.

Kalshi taxes, answered

Are Kalshi losses tax-deductible?
Yes. Kalshi event contracts trade on a CFTC-regulated, designated contract market, so we treat them as Section 1256 contracts. Losses are reported on Form 6781 and can offset capital gains and, up to $3,000 a year, ordinary income — with the remainder carried forward.
How much can I save on taxes from my Kalshi losses?
It depends on your tax bracket, your other capital gains, and the size of your loss. The calculator above gives an illustrative lifetime estimate; Realize computes the exact figure once you connect your account.
What is the Section 1256 60/40 rule?
Section 1256 contracts are taxed as 60% long-term and 40% short-term capital gain or loss, regardless of how long you held them. That blended rate is usually lower than treating every gain as short-term.
Can I get a refund for a prior winning year on Kalshi?
Possibly. A net Section 1256 loss can be carried back up to three years under §1212(c) to offset prior Section 1256 gains, which can generate a refund via an amended return. Realize computes your exact carryback once you connect your account.

Important

Realize is a data tool, not a tax advisor, and gives no tax, legal, or financial advice. The figures on this page are illustrative and depend on your full return, prior-year filings, and IRS processing. Verify every figure and consult a tax professional before filing. State rules vary. See our full tax disclaimer.