Cost basis

What you paid to enter a position, including fees. Your taxable gain is your proceeds minus your cost basis. Kalshi does not provide a broker-style basis report, so traders reconstruct it from their fills.

For a contract, basis is price times quantity plus acquisition fees. The work is reconstructing it across partial fills and repeated trades in the same market, which is where a consistent matching method like FIFO becomes necessary.

Cost basis is what you paid to acquire a position, and it is the figure your gain or loss is measured against. For an event contract, the basis is the price you paid per contract plus any fees, so a contract bought at 40 cents with fees has a basis a little above 40 cents. When the contract settles or you sell it, your gain or loss is the proceeds minus that basis.

Tracking basis is straightforward for a single trade but gets harder when you build a position in pieces at different prices. If you buy the same market at 30, 35, and 45 cents, you need a consistent method (such as FIFO) to decide which lots you are selling and therefore what basis applies. Kalshi's activity export gives you the raw fills, and a good analyzer reconstructs the basis for you.

Accurate basis is the foundation of an accurate tax figure. Overstating basis understates your gain (a problem if audited), and understating basis overstates your gain (you overpay). Because event-contract trades are generally not reported on a 1099-B, getting basis right is on you, which is why a clean, complete record matters.