Why Did Kalshi or ZeroHash Send a 1099-B or 1099-DA After a Crypto Deposit?

If you funded Kalshi with crypto, a 1099-B or 1099-DA reflects that crypto activity, not your event-contract trading. Kalshi describes its 1099-B as covering "broker transactions (crypto transfers)" and its 1099-DA as digital asset reporting from ZeroHash. The form may show proceeds with little or no basis, which can look like a big gain. Your actual tax is on the difference between what the crypto was worth and what you paid for it.

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

What Kalshi says each form is

From Kalshi's tax documentation page:

Forms are issued only if you hit IRS reporting thresholds, and some are delivered by Zenwork. Your event-contract result is in the separate P&L statement.

Kalshi's page doesn't explain exactly which transaction goes on which form. So the first step is to read your own form and match each line to a date in your deposit or withdrawal history.

Why crypto rails create a sale

When you deposit crypto and your balance shows dollars, something converted it. The IRS treats selling or exchanging a digital asset as a disposal, and it says to report capital gains and losses on Form 8949. Your gain is proceeds minus your basis.

The prices are illustrative. The same is true on the way out: if a withdrawal involves a conversion to crypto, there's a purchase of crypto, and sometimes a further sale.

Reading the form

For digital assets, Form 1099-DA reports gross proceeds for transactions from January 1, 2025, and basis for certain transactions from January 1, 2026. If you sent crypto from an outside wallet to Kalshi, the broker usually doesn't know your cost. Expect a blank or "noncovered" basis.

Stablecoins can be different. A broker may use the optional method for qualifying stablecoins, which reports only above $10,000 of annual proceeds, in aggregate, with no basis.

Worked example

In 2026 you sent 0.5 BTC to Kalshi, which is converted for your balance at a value of $50,000. You bought that BTC for $30,000 in 2023. All prices are illustrative.

If you ignored the form, the IRS might see $50,000 of unreported proceeds. If you report it with your real basis, you pay long-term rates on $20,000. If you also lost $5,000 on Kalshi contracts, how that interacts depends on your treatment. Under capital treatment, it offsets the BTC gain. Under gambling treatment, it doesn't.

Which Form 8949 box?

Use the digital asset boxes for digital asset sales: G, H or I for short-term and J, K or L for long-term. The Form 8949 instructions say not to use boxes C or F for digital assets. Which box depends on whether the form reports basis to the IRS. For a 1099-B that reports a crypto transaction, follow the form's label and the instructions, or ask your preparer, because Kalshi's wording leaves this open. See reporting on Form 8949.

Common confusions

"This is my Kalshi income." No. These forms aren't your trading result. Adding their proceeds to your P&L counts things twice and overstates income.

"A transfer can't be taxable." A transfer between your own wallets isn't taxable, even if a form was issued. But a deposit that converts crypto into a dollar balance may not be a mere transfer. Check what actually happened to your coins.

"I have no record of basis." Rebuild it from the exchange where you bought the crypto. Without support, a blank basis is a problem for you, not the IRS.

"The form says crypto transfers, so nothing was sold." Kalshi's short label doesn't settle what your transactions were. Use your account history.

Digital asset question

Check Yes on Form 1040 if your crypto was sold or exchanged. That's different from a Kalshi-only dollar account, which is generally No.

If you get a notice

A blank-basis form is a common source of CP2000 notices. You respond with a Form 8949 and your purchase records. Don't pay on the full proceeds before checking.

What to do

1. Download every form from Tax Info, and check for the Zenwork email.
2. Match each line to a deposit, withdrawal or conversion.
3. Find your purchase records for the crypto.
4. Report on Form 8949 with real basis.
5. Keep your event-contract P&L separate.

Your wider picture is in Kalshi taxes and the 1099. If you also trade on-chain, run the free OddsFile check: paste a Polymarket or Hyperliquid address and see your 2026 P&L under each treatment, no signup.

FAQ

Is the Kalshi 1099-B my profit?

Kalshi says its 1099-B covers crypto transfers, not your event contracts. It shows proceeds, which isn't profit.

I only used dollars. Why would I get one?

You probably wouldn't. If you did, ask Kalshi what transaction it reflects.

Do I report if the gain is $0?

Yes, if the form reports a sale. Showing the sale with its basis ties your return to the form.

Who is ZeroHash?

Kalshi names ZeroHash as the source of the 1099-DA. It's the crypto partner behind that reporting.