Polymarket taxes

Polymarket taxes, from your wallet to Form 8949

Polymarket trades are on-chain token swaps settled in USDC, which makes every sale and every redemption a disposal. Paste your proxy wallet and we rebuild the full history: trades, taker fees, redemptions and the losing positions that were never redeemed.

Your proxy wallet: Polymarket profile → wallet address. Read-only, no signup, nothing stored.

What makes Polymarket different

Fees are hidden in the fill

The taker fee is the gap between USDC paid and size × price. We recover it per fill and add it to cost basis.

Losses you never redeemed

Most losing positions are never redeemed on-chain. We settle them at zero on the market end date so the loss is not lost.

Redeems without a token id

Many redemptions only carry the winning outcome index. We map them back to the token you held.

Treatments

How Polymarket activity could be taxed

There is no IRS ruling for event contracts. We compute each option on your trades.

Capital asset

Form 8949 + Schedule D

Gains: Short-term at ordinary rates if held one year or less; long-term rates if held longer.
Losses: Offset capital gains, then up to $3,000 a year of ordinary income; the rest carries forward.
When it comes up: The common default for crypto-settled positions, including Polymarket outcome tokens held in your own wallet.

Section 1256 (60/40)

Form 6781

Gains: 60% long-term and 40% short-term, whatever the holding period. Open positions are marked to market on Dec 31.
Losses: Capped like capital losses, with an optional 3-year carryback against prior Section 1256 gains.
When it comes up: Only for contracts that qualify as regulated futures on a qualified exchange. Whether event contracts qualify is unsettled.

Other income

Schedule 1, line 8z

Gains: Net profit is ordinary income at your marginal rate.
Losses: A net loss generally cannot offset other income.
When it comes up: A conservative reading some preparers use for exchange-traded event contracts while guidance is missing.

Gambling

Schedule 1 + Schedule A

Gains: Every winning session is income, even if you lost overall.
Losses: Deductible only if you itemize, and from 2026 only 90% of losses, never more than winnings.
When it comes up: The least favorable outcome for most active traders, and the one to understand before you file.

Polymarket tax guides

All guides

Are Polymarket Losses Tax Deductible? What Happens If You Lost Overall

Lost money on Polymarket? Whether the loss is deductible depends on the treatment: capital, gambling (90% cap from 2026) or other income. Worked examples.

Polymarket 1099: Does Polymarket Send Tax Forms?

Does Polymarket send a 1099? The international exchange doesn't. What Polymarket US may send, and how to report your trades without a form.

Polymarket Fees and Taxes: How Taker Fees Change Your Gain or Loss

Polymarket taker fees reduce your taxable gain under every treatment, but where they go differs. Formula, worked example, and how gas and bridge fees fit.

Polymarket Taxes With Multiple Wallets: Proxy Wallets, Transfers and Basis

Trading Polymarket from several wallets? Which address to use, why transfers between your own wallets aren't taxable, and how per-wallet basis works.

Polymarket Taxes: The Complete Guide (2026)

Do you pay taxes on Polymarket? Yes. How trades, redemptions, rewards and USDC are taxed, the four possible treatments, and a worked example for 2026.

Polymarket Unredeemed Losing Positions: How They Affect Your Taxes

Never redeemed your losing Polymarket shares? Most tools then miss the loss and overstate your gains. How to find them, date them and treat them for taxes.

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