The Kalshi tax guide nobody hands you (because Kalshi doesn’t)

If you made money trading on Kalshi this year, here’s the uncomfortable part: you owe tax on it, and almost nothing will arrive in the mail to help you figure out how much.

Unlike a stock broker, Kalshi generally does not issue a comprehensive 1099-B summarizing your trading gains and losses. You might get a 1099-INT for interest or a 1099-MISC for rewards, but the profit and loss from your actual trading is left for you to reconstruct and report. The missing form does not remove the obligation. It just moves the work onto you.

So here is the guide nobody hands you.

First, the data trap. When you export your trade history, the numbers are in cents, not dollars. A value of 4200 means 42 dollars, not 4,200. Read it as dollars and every figure on your return is off by a factor of one hundred. Divide the monetary columns by 100 before you do anything else, and remember that fees are in cents too.

Second, the cost basis. Your gain is your proceeds minus what you paid, including fees. Because Kalshi gives you no clean basis report, you reconstruct it from your fills, matching buys to sells with a consistent method like first in, first out. Tedious, but it’s the foundation of an accurate return.

Third, and this is the big one, the classification. Event-contract income can plausibly be treated three different ways, and they produce very different bills. Ordinary income taxes the whole gain at your marginal rate, simple and conservative. Section 1256 treatment, if it applies, splits your gain 60 percent long-term and 40 percent short-term regardless of how long you held, which usually blends to a lower rate. Gambling treatment is generally the worst, especially now that a 2026 rule limits deducting gambling losses to 90 percent of winnings, which can leave a roughly breakeven trader owing tax on phantom income.

Which treatment applies to Kalshi contracts is genuinely unsettled. Kalshi being a CFTC-regulated exchange is the strongest argument for Section 1256, but a swap-style exclusion cuts the other way, and reasonable professionals disagree. The practical move is to see your result under each treatment in real dollars, then take a defensible position with a CPA.

That last step is exactly why I built ContractTax: it ingests the cents CSV, reconstructs your basis, and shows your net under all three treatments side by side, so the conversation with your preparer starts from real numbers instead of a spreadsheet you dread building. There’s a demo with no signup if you want to see what that looks like.

None of this is tax advice, and the rules are unsettled enough that anyone with real volume should loop in a professional. But the absence of a 1099-B is not the absence of an obligation, and going in with clean numbers is the whole game.