How to report your Kalshi taxes in TurboTax
TurboTax cannot auto-import your Kalshi event-contract trades, because Kalshi does not issue a comprehensive 1099-B for them. That means manual entry, and which screens you use depends on the treatment you and your preparer choose.
This guide walks through preparing your numbers and the two most common manual paths in TurboTax. It is educational, not tax advice, and the classification question for prediction markets is genuinely unsettled, so treat this as a map of the options, not a recommendation.
- Before you touch TurboTax, reconcile your trade history into dollars.
- The most conservative treatment reports your net as other income.
- If you treat the contracts as Section 1256, TurboTax has a dedicated area.
- The big one is forgetting the cents conversion, which inflates every number by one hundred.
- ContractTax turns your raw Kalshi export into the exact figures these TurboTax screens ask for: a clean net in dollars, the per-trade detail behind it, and the same result under ordinary, Section 1256, and gambling treatment so you can see which path costs what before you type anything in.
First, get your numbers right
Before you touch TurboTax, reconcile your trade history into dollars. Remember the Kalshi CSV is in cents, so divide the monetary columns by 100, and make sure fees are included in your net. You want a single clean figure for your annual gain or loss, plus the supporting per-trade detail in case you need it.
If you are taking the Section 1256 position, it helps to know your gross number going in, even though the form handles the 60/40 split for you.
Path 1: ordinary income
The most conservative treatment reports your net as other income. In TurboTax this lives under Less Common Income, then Miscellaneous Income, as a custom entry that lands on Schedule 1, line 8z, with a short description such as Kalshi event-contract income.
This path is simple because there is no per-trade entry, just your net figure, but it taxes the whole amount at your ordinary rate with no 60/40 benefit.
Path 2: Section 1256 (Contracts and Straddles)
If you treat the contracts as Section 1256, TurboTax has a dedicated area. Search for Contracts and Straddles, or find it under Investment Income, and elect Section 1256 contracts. This produces Form 6781 and applies the 60/40 split automatically.
Because claiming 1256 for event contracts is an aggressive position, many filers attach a disclosure on Form 8275 to flag the stance. TurboTax does not always make that easy, which is one reason traders taking this path often work with a preparer.
Common mistakes to avoid
The big one is forgetting the cents conversion, which inflates every number by one hundred. The second is double-counting: do not enter the same income under both a 1099-MISC for rewards and your trading total, since referral credits and trading gains are different things.
Finally, keep your supporting records even after entering a single net figure. If the return is ever questioned, you want the per-trade history that backs up the number.
Where ContractTax fits
ContractTax turns your raw Kalshi export into the exact figures these TurboTax screens ask for: a clean net in dollars, the per-trade detail behind it, and the same result under ordinary, Section 1256, and gambling treatment so you can see which path costs what before you type anything in.
It does not file for you or choose your treatment. It gets you to the right numbers so the manual entry is quick and correct.