Are Hyperliquid Perps Section 1256 Contracts? Why 60/40 Probably Doesn't Apply

Hyperliquid perps are very unlikely to be Section 1256 contracts, so you shouldn't plan on 60/40 tax treatment. Section 1256 needs a regulated futures contract traded on a qualified board or exchange, and Hyperliquid is an on-chain venue that isn't one on any list we can find. Most traders report closed perp positions as short-term gains and losses on Form 8949. The IRS hasn't issued guidance on perps specifically, so that's practice, not a ruling.

OddsFile is software, not tax advice. The IRS has not issued guidance on how perpetual futures are taxed. This article explains the options and the sources behind them; a tax professional can tell you which position fits your situation.

What Section 1256 requires

Section 1256(b) lists five kinds of contracts: regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options and dealer securities futures contracts. Perps could only fit as a regulated futures contract.

Under §1256(g)(1), that means:

1. A contract whose required deposits and permitted withdrawals depend on a system of marking to market, and
2. It "is traded on or subject to the rules of a qualified board or exchange."

Under §1256(g)(7), a qualified board or exchange is a national securities exchange registered with the SEC, a domestic board of trade designated as a contract market by the CFTC, or another market the Treasury determines has adequate rules.

Applying the tests to Hyperliquid

The first test might be met. The second is where it fails. Hyperliquid's on-chain exchange isn't a US designated contract market, so the contract isn't traded on a qualified board, whatever its economics.

What about regulated US perps?

Kalshi's APY page now mentions a perps product, and other US venues may list similar contracts. A contract traded on a CFTC-designated market can pass the exchange test, which makes the argument real for that contract. It still needs to be a regulated futures contract with qualifying margining, and the exclusion for swaps at §1256(b)(2) needs checking. Check that venue's tax forms and ask a preparer. Nothing here carries over to Hyperliquid.

How perps are usually reported

Without Section 1256, the common approach for a perp is:

More on this in Hyperliquid taxes: the full guide. Hyperliquid sends no 1099, so you build this yourself.

The capital gain or loss treatment isn't confirmed either. A perp isn't a stock or a coin. Section 1234A can support capital treatment for termination of rights in capital assets. H.R. 10357, as introduced, would amend Section 1234B to cover futures contracts in digital assets, but it isn't law, and that shows Congress sees a gap. If you're in doubt, take this to a preparer.

What 60/40 would be worth

For a sense of what's at stake, take a $50,000 net short-term gain.

The saving is real, so the temptation is too. If the IRS rejected the claim, you'd owe the difference plus interest, and possibly a 20% accuracy penalty. Using Form 6781 for an offshore venue isn't a neutral choice. It's an affirmative claim about the contract.

Also remember that Section 1256 isn't only a benefit. It would mark open positions to market at year end, so you'd pay on unrealized gains.

A note on outcome markets

Hyperliquid also lists prediction-style markets. The same reasoning applies to those. See Hyperliquid taxes and, for the event-contract question generally, Section 1256 and prediction markets.

The CFTC's 2026 proposal to define event contracts as swaps concerns event contracts, not crypto perps.

Wash sales and perps

Under current law, the wash sale rule covers stock and securities, so perps on crypto likely fall outside it. H.R. 10357 would expand it to traded digital assets if enacted, and how that would treat derivatives is a question for the final text.

Trader tax status

An active perp trader could meet the trader tax status activity test. That brings Schedule C expenses and the option of a Section 475 election for commodities, if perps on crypto fit the definitions. It's a separate route from 60/40, and ordinary treatment is the opposite of what a 60/40 claimant wants.

What to do

1. Assume short-term treatment on closed positions when you estimate.
2. Don't file Form 6781 for Hyperliquid perps without specific professional advice in writing.
3. Keep fills, funding and fees by coin and by date.
4. Set aside tax: there's no withholding, and a profitable year can need estimated payments.

Run the free OddsFile check: paste a Hyperliquid address and see realized P&L, fees and funding for 2026, no signup.

FAQ

Do Hyperliquid perps get 60/40 tax treatment?

Very unlikely. The venue isn't a qualified board or exchange under the statute as far as we can find.

Are perps taxed as capital gains?

That's the common reporting approach, usually short-term. The IRS hasn't addressed perps.

Is a perp a futures contract for tax purposes?

There's no IRS answer. Even if it were called a future, Section 1256 needs a qualified exchange.

Does holding a perp for over a year give long-term rates?

It might under capital treatment, but it's untested, and funding complicates it.