Prediction Market Tax Accountant: Who Reconciles Polymarket and Kalshi?

What A Prediction Market Tax Accountant Actually Does

The job is reconstruction. A prediction market trader ends the year with a list of contract fills, a list of resolutions and a wallet or bank trail that funded all of it, and none of those three things line up on their own. The accountant's work is to turn them into a per-position record of what was bought, what it cost, what it returned and when, in a form a tax return can be built from.

The numbers, not the signature

Two separate jobs sit inside what people call "doing my prediction market taxes". One is building the figures. The other is preparing and signing the federal return. They are often done by different people, and the IRS treats them differently: any tax professional holding a preparer tax identification number is authorized to prepare federal returns, while unlimited representation rights before the IRS belong to enrolled agents, certified public accountants and attorneys. CountDeFi builds the figures. The return is signed by the preparer you choose.

Why the platform export is a starting point, not a return

Platform exports are built for traders checking performance, not for filing. A year-end profit and loss figure tells you how you did. It does not tell you the acquisition date and cost of each position, which contracts resolved worthless, which were sold before resolution, or how the funding currency moved. Those are the fields a return needs, and rebuilding them is most of the engagement.

Where the crypto funding leg fits

On any platform funded in stablecoins there is a second tax layer under the trading. Moving dollars into USDC, moving USDC between wallets and converting back out are dispositions of property in their own right, because digital assets are treated as property for US tax purposes, not as currency. A preparer who reconciles the contract book and ignores the funding book has done half the work. Our walkthrough of how prediction markets are taxed sets out both layers.

Why Kalshi And Polymarket Land On A Preparer's Desk Differently

Traders often assume the two platforms create the same paperwork problem. They do not, and the difference decides how much reconstruction the engagement needs.

An exchange-routed book with a broker form

Contracts routed through a CFTC-regulated exchange sit inside a familiar reporting structure. The CFTC maintains the register of designated contract markets, and brokers operating in that structure issue year-end information returns. Where a Form 1099-B arrives, the instructions for that form set out how regulated futures contract activity is reported, including the aggregate profit or loss boxes that look nothing like a line-by-line trade list. Our Kalshi tax guide covers what that form does and does not cover.

An on-chain book with no form at all

An on-chain prediction market produces no information return. What exists is a public transaction record: position tokens acquired, positions closed, resolutions paid, gas and fees taken. Everything a return needs has to be read off the chain and priced. That is a different skill from reading a broker statement, and it is the reason the two platforms carry different fees for the same trade count. Our Polymarket tax guide works through the reconstruction.

What a mixed book does to the workload

Most active traders hold both, and increasingly a brokerage event contract account as well. A mixed book adds a third problem on top of the two reconstructions: keeping one consistent treatment across platforms for economically identical contracts, and being able to show why. Brokerage event contracts have their own reporting pattern, which we cover in the guide to Robinhood event contracts.

What The Reconciliation Work Involves

Here is what actually happens between handing over exports and receiving a finished pack.

Rebuilding positions from open to resolution

Each contract is matched from the fill that opened it to the event that ended it, whether that was a sale before resolution or the resolution itself. Partial fills are aggregated into positions, prices in cents are converted to dollars, and every position carries its own acquisition date and cost. This is what produces the per-line detail a Form 8949 or a Form 6781 needs, depending on the treatment the return takes.

Matching the stablecoin funding leg

Deposits and withdrawals are matched to the exchange or wallet at the other end so that a transfer is recorded as a transfer rather than as a purchase and a sale. Unmatched legs are what create phantom gains, and they are the single most common defect we find in a self-prepared prediction market year. Form 1099-DA broker reporting is required for digital asset transactions on or after 1 January 2025, which helps on the custodial side and does nothing for the on-chain side.

Fees, rebates and credits

Trading fees, settlement fees, network fees, referral credits and promotional payments each have a place. Fees adjust proceeds or basis; credits and interest paid on idle balances are income in their own right. Sweeping all of it into one net number is fast and wrong.

Who Signs The Return, And Who Builds The Numbers

This is the part traders most often get wrong when they shop for help, and it costs them either money or protection.

The three credentials with unlimited representation rights

Enrolled agents, certified public accountants and attorneys may represent a client before the IRS on any matter, including audits, collection and appeals. If your concern is an examination of a contested treatment rather than the arithmetic, that is the person you want engaged, and engaged early. We set out the credential map in the guide to checking a crypto CPA's licence.

What a preparer without those credentials may do

A professional holding a preparer tax identification number may prepare and sign a federal return without holding any of those three credentials. What changes is representation, not the right to prepare. Plenty of returns are correctly prepared by people who could not argue them at appeals, which is fine until the day somebody has to.

Where CountDeFi sits in that split

CountDeFi is not a CPA firm and employs no CPA. We are crypto tax accountants: we reconcile the history, we produce the schedules and the reports, and we hand them to the CPA, enrolled agent or attorney who files. Chris Herbst is a Chartered Business Accountant in Practice (CBAP) with the Chartered Institute for Business Accountants and a General Tax Practitioner (GTP) with the South African Institute of Taxation. If you want one provider who both reconciles and signs, you want a licensed US firm, and we will say so rather than take the work.

Eight Questions That Separate A Specialist From A General Accountant

Ask these on the first call. The answers separate a firm that has done this from a firm that will learn on your file.

• How do you rebuild a position when the only record is on-chain?
• How do you treat the stablecoin funding leg, and do you price it separately?
• Which treatment do you apply to event contracts, and what documentation supports it?
• How do you keep one treatment consistent across two platforms in the same year?
• What do you do with contracts that resolved worthless?
• Who signs the return, and who is available if it is examined?
• What exactly do I receive at the end, and in what format?
• What happens to prior years that were filed without this detail?

A general accountant who answers "send me the annual statement and I will put the number on Schedule 1" has told you what the engagement will be. That may be the right answer for a very small year. It is the wrong answer for a book with thousands of contracts across two platforms.

When A General Accountant Is Enough

The small, single-platform year

One platform, a modest number of contracts, funding by bank transfer rather than stablecoin, no contested treatment. A competent general preparer can handle that from the platform's own records, and paying specialist fees for it buys nothing.

The mixed, high-volume year

Two or more platforms, an on-chain book, stablecoin funding, a treatment decision that changes the tax materially, or prior years that were filed thin. Every one of those is a reconstruction problem before it is a filing problem, and a preparer without the tooling will either decline it or estimate it. The treatment decision itself is worth reading up on: our guide to Section 1256 for prediction market traders explains what the 60/40 split turns on and why it is not automatic.

How CountDeFi Works With Prediction Market Traders

You send the exports and the wallet addresses. We ingest every source, reconcile each position, match the funding leg, verify closing balances against the platform and the chain, and produce the reports and schedules your preparer files from. Anything we cannot establish from your data we ask about rather than estimate. The full service is described on our prediction market accounting page, and the underlying reconciliation work on crypto tax accounting. If you are still deciding what kind of help you need, our guide to what a crypto accountant does is the shorter version of this page.