How Are Kalshi Perps Taxed? Section 1256, Funding and Your Forms

Nobody has confirmed how Kalshi perps are taxed. Because they are listed on a CFTC-designated contract market and treated as futures for CFTC purposes, they have a real argument for Section 1256 and its 60/40 treatment, which event contracts and offshore perps lack. But futures status under commodities law doesn't decide tax treatment, Kalshi's tax page doesn't mention perps, and the IRS has said nothing. Get the form first, then decide with a preparer.

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 Kalshi perps are

From Kalshi's help center and its margin account page:

• A perp is a contract on an asset's price with no expiration date.
• Kalshi calls itself a CFTC-regulated Designated Contract Market, and trades clear through Kalshi Klear LLC.
• Kalshi Prime acts as the futures commission merchant.
• Your margin account is separate from your predictions balance.
• Funding is exchanged between longs and shorts on a schedule, capped at 2% per interval.
• Margin earns interest while held at the clearinghouse, about 3.50% APY when we checked.

A June 2026 CFTC filing says Kalshi and Klear intend to treat the contract as a futures contract for purposes of the Commodity Exchange Act and CFTC regulations. That is a regulatory statement, not a tax one.

Why Section 1256 is a live question here

Section 1256(g)(1) defines a regulated futures contract by two tests:

So the exchange test, which sinks offshore perps, looks satisfied. That's a major difference from event contracts, which are fully collateralized and have no margining.

Open questions remain:

• Is a perp a "contract" of the kind Section 1256 had in mind? The statute doesn't require an expiration, but no authority has addressed a contract with none.
• Does funding fit? It's a recurring cash flow more like a swap payment. Section 1256(b)(2) excludes swap-type agreements, including commodity and equity swaps or similar agreements. If a perp were seen as a swap in substance, it would be out.
• Underlying assets. Crypto, gold, silver and equity index perps may raise different points.

Compare the two main approaches

Assume a single filer at 24% with a 15% long-term rate and a $20,000 net gain on perps closed in 2026, with no open positions at year end.

The $1,080 saving is real, but open positions matter. A trader holding a $30,000 unrealized gain on December 31 would owe tax on it under Section 1256, even if it reverses in January.

Why the form matters

Kalshi's tax page lists 1099-INT, 1099-MISC, 1099-B for "broker transactions (crypto transfers)" and 1099-DA, plus a P&L statement. None of that describes perps. Since a futures commission merchant is involved, a 1099-B reporting regulated futures contracts is possible, but we found nothing from Kalshi saying what you'll get.

If a 1099-B does report aggregate profit on regulated futures, that's a strong signal for how the broker classifies the contract, and you should reconcile to it. Departing from it means explaining why. Until a form arrives, don't assume.

The Form 6781 instructions cover how a 1099-B figure carries over.

Funding

Funding payments between traders aren't fees to Kalshi. Their treatment under either approach is not addressed:

• Under Section 1256, a broker's aggregate figure may already reflect funding in realized profit. Check.
• Under capital reporting, the same choice as on Hyperliquid arises: treat funding as part of the trade, or separately as income and expense. See funding payments.

Keep funding records separately until you've decided.

Interest on margin

Interest earned on perp margin is ordinary interest, regardless of how the contracts are treated. It may arrive on a 1099-INT at $10 or more. See Kalshi interest and rewards.

Two accounts, two tax positions

Your perps and predictions accounts are separate, and they can be taxed differently. Claiming Section 1256 on perps doesn't mean you should claim it on event contracts. Kalshi's FIFO P&L statement is described for trading activity; don't assume it includes perps until you've compared it with your perps history.

Liquidation

Kalshi warns that margin calls can lead to liquidation, and that liquidation isn't a guaranteed stop-loss. A liquidation closes the position, so it's a realized result at the liquidation price under ordinary reporting. A negative balance you later pay is a further loss in the position.

What to do this year

1. Save your perps history, separate from predictions: fills, funding, fees, interest and liquidations.
2. Save the year-end mark of every open position.
3. Wait for your forms before choosing a treatment.
4. Check that margin interest isn't double counted.
5. Estimate tax both ways, and set money aside for the higher figure.

Run the free OddsFile check: paste a Polymarket or Hyperliquid address and see your 2026 P&L under each treatment, no signup. For Kalshi itself, start with Kalshi taxes and the 1099.

FAQ

Are Kalshi perps Section 1256 contracts?

They may be. The exchange test looks satisfied, but the IRS hasn't said, and Kalshi hasn't published a tax classification.

Do perps get a 1099 from Kalshi?

Kalshi's tax page doesn't address perps. Check your forms when they arrive.

Is 60/40 safe to claim on Kalshi perps?

It's more defensible than on Hyperliquid, but it's still a position, not a rule. Take your forms to a preparer first.

Does this mean Kalshi event contracts get 60/40 too?

No. Event contracts are a different product, and they lack margining.