Prediction markets are booming. Is your Kalshi and Polymarket tax reporting IRS-ready?

// PREDICTION MARKET TAX SPECIALISTS

CountDeFi.
Leaders in prediction market tax reporting.

CountDeFi provides specialised tax accounting for US prediction market traders. We're not just CPAs, we're data scientists who reconstruct your full trading history across Kalshi, Polymarket, and on-chain platforms to deliver accurate, defensible tax reports.

If your activity is complex, spans multiple platforms, or runs on-chain through Polymarket, CountDeFi can help with affordable plans. 

We operate online and in your timezone.

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Experienced across leading prediction market platforms

The IRS Hasn't Ruled. Your Return Still Has To.

There is no IRS guidance telling you how prediction market gains are taxed. Depending on the facts, your Kalshi or Polymarket gains could be treated as Section 1256 contracts, capital gains, ordinary income, or gambling, and each one produces a different tax bill. We help you take a position you can actually defend.

The Break-Even Trap Most Traders Miss

From tax year 2026, if your gains are treated as gambling, you can deduct only 90% of your losses against your winnings. That means a trader who wins 100,000 dollars and loses 100,000 dollars, net zero, can still owe tax on 10,000 dollars of phantom income. Getting your classification and records right is what keeps you out of that trap.

Avoid overpaying Predictions Markets Tax

The difference between a realised gain, settlement payout, trading profit, or income event can materially change your tax outcome. Reviewing your trading history, settlement activity, and wallet records before filing helps ensure you're reporting correctly and paying only what the rules require.

// who we are

"Prediction market taxes aren't just about calculating gains and losses. The reporting position you take can materially affect your tax bill. CountDeFi helps traders identify the most appropriate and tax-efficient treatment based on their facts and circumstances."

Chris Herbst

Founder

// PREDICTION MARKETS  TAX experts

Defensible prediction markets reporting in a grey area of tax

Prediction market tax has never been straightforward. We've been reconstructing complex trading and on-chain activity since 2017, helping traders handle everything from a handful of Kalshi contracts to thousands of Polymarket positions across wallets.

Usually, the biggest challenge isn't the tax rate. It's two things: the data, and the classification. Polymarket runs on-chain with no 1099-DA, so every deposit, trade, and withdrawal has to be reconstructed from wallet activity. And with no IRS guidance, whether your gains are Section 1256, capital, ordinary, or gambling income changes what you owe.

These aren't edge cases. It's the reality of trading event contracts in 2026. Without solid data and a clear position, you can't know your real tax exposure. So how can you be confident your return holds up if the IRS asks?

CountDeFi reconstructs incomplete trading histories, traces activity across platforms and wallets, and delivers accurate, defensible tax reports you can file with confidence. Getting your prediction market taxes sorted doesn't have to cost a fortune. At CounfDeFi we do not bill by the hour. Instead, our pricing scales with transaction volume and complexity, and all plans include software fees, transaction reconciliation, and a complete tax report.

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// services

Our prediction markets accounting services

Polymarket Tax Reporting

Polymarket activity often combines wallet transactions, USDC funding, market settlements, and event contract trading. CountDeFi reconstructs complete trading histories and produces accurate tax calculations.

Prediction Market Gain & Loss Tracking

Every market purchase, sale, settlement, and payout can affect your tax position. CountDeFi calculates gains and losses across your complete trading history.

Wallet & USDC Reconciliation

Funding prediction markets often involves moving USDC across exchanges and self-custody wallets. Missing transfers can distort gain calculations and create reporting errors.

Prediction Market Settlement Analysis

Market resolutions create unique reporting challenges that many tax tools struggle to interpret correctly. CountDeFi reviews settlements individually to ensure accurate treatment.

Kalshi Tax Reporting

Kalshi traders frequently deal with hundreds of settled contracts across multiple markets. CountDeFi reconciles positions, settlements, and account activity to ensure accurate reporting.

Multi-Platform Reconciliation

Many traders use multiple platforms over time. CountDeFi consolidates data from prediction markets, exchanges, and wallets into a single reporting framework.

Missing Transaction Recovery

Lost exports and incomplete records are common. CountDeFi rebuilds missing histories using wallet data, blockchain records, and platform information.

Cross-Border Reporting

We assist traders subject to reporting obligations in multiple jurisdictions, including the US, South Africa, Australia, Canada, and the UK.

Read our 2026 Prediction Markets Tax Guide

// EXPERT SKILLS

Why prediction market traders hire CountDeFi

Prediction market traders often need professional help because the tax situation is complex, on two counts.  First, the records. Platforms like Polymarket run on-chain, often without sending tax forms to their customers. Traders can end up with thousands of transactions spread across wallets, exchanges, USDC transfers, deposits, withdrawals, market settlements, and closed positions.

Secondly, the rules. The IRS has not issued direct guidance on how prediction market contracts should be taxed. The same trading activity may be reported under different frameworks, with materially different tax outcomes.CountDeFi helps with both. We reconstruct your trading history from wallets, exchanges, and prediction market activity, then analyse the most appropriate tax treatment based on your facts and circumstances. The result is a complete filing position supported by documentation, calculations, and a methodology you can explain and defend.

// TAILORED PRECISION

Why tax software battles with complex crypto

Tax software is a great starting point, but prediction markets like Polymarket and Kalshi create challenges most platforms weren't built to handle. Traders often move funds between wallets, exchanges, USDC, and multiple prediction markets, while unresolved tax classification questions can materially affect the final tax outcome.

That's where CountDeFi comes in. We reconstruct the data, review the activity, and help determine a defensible reporting position. The result is a complete tax report you can file with confidence. CountDeFi is Koinly's #1 Global Partner, and we use Koinly's calculation engine as part of our reporting workflow. If you already have a Koinly portfolio, we can work directly from it.
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// WORK WITH US

How to work with CountDeFi to calculate your
Polymarket taxes

At CountDeFi, we use our proprietary Precision 7 System to take you from data chaos to crypto tax clarity. We ingest data from Polymarket, Kalshi, wallets, exchanges, and DeFi protocols, identify missing records, reconcile transactions, and prepare a complete tax position. Where records are incomplete, we investigate. Where tax treatment is unclear, we help determine a defensible approach.

It starts with a free 15-minute consultation to discuss your trading activity and recommend the right pricing plan for your needs. We work remotely with clients across the US and globally. Book an obligation-free call today.

Book a Free Consult