Last Updated on October 3, 2026 by Patrick Camuso, CPA
Quick Answer
Prediction markets do not currently follow one uniform tax-reporting model. Depending on where and how you trade, you may receive a 1099, an annual trading statement, a P&L report, separate prediction market tax documents for interest or digital-asset activity, or no federal information return covering the event contracts themselves.
That does not change the taxpayer’s obligation to report the activity correctly. The important question is what each document actually covers. For taxpayers, the starting point is not simply whether a 1099 arrived. It is what the document actually reports, what activity it leaves out, and whether the complete account records support the amounts ultimately reported on the tax return.
The lack of uniformity reflects a larger issue which is that the IRS has not established a prediction-market-specific information-reporting regime, and existing rules do not fit every event contract neatly.
Tax Documents Vary by Platform
There is no standard year-end package that every prediction market trader should expect.
Kalshi provides one of the clearest examples. Its current guidance says users who meet applicable reporting thresholds may receive Form 1099-INT for interest payments, Form 1099-MISC for credits and rewards, Form 1099-B for broker transactions it describes as crypto transfers, and Form 1099-DA for digital-asset transaction reporting from ZeroHash. The trading activity is handled separately. Kalshi provides a P&L statement, uses FIFO to calculate its reported profits and losses, and says the P&L includes fees and rebates. A trader can receive several tax forms associated with a Kalshi account without any of those forms being a comprehensive information return for the event-contract trading. Our Kalshi tax reporting guide addresses the venue-specific reporting issues in more detail. The broader lesson is that the name of a form matters less than the activity it actually reports.
Robinhood currently provides an Event Contracts Annual Statement after year-end containing individual transactions, closing dates, costs, proceeds, fees and commissions, and net profits and losses. Robinhood expressly states that the annual statement is not a substitute tax reporting form. It also currently states that event-contract trades are not reported to the IRS by Robinhood and that Robinhood does not provide a 1099 for those trades. Our Robinhood Prediction Market Taxes guide examines that reporting model separately.
Polymarket creates another recordkeeping challenge. Its on-chain environment does not provide the same conventional year-end reporting package a taxpayer might expect from a traditional broker. The absence of a standardized tax form places more weight on transaction history, portfolio records and wallet data. Our Polymarket Taxes guide covers that reconstruction problem in detail. Camuso CPA
These differences are why venue-specific reporting facts should not be carried from one prediction market to another. The current platform, intermediary structure and documents actually furnished matter.
Why Reporting Is Not Uniform
The differences among platforms reflect a more fundamental problem which is that existing federal information reporting rules were not built around today’s prediction market ecosystem. The reporting question can also depend on the underlying tax characterization, which is unsettled.
There are potentially different reporting analyses depending on whether the relevant income is treated as capital gain, ordinary income or wagering income. Those paths can raise questions involving Form 1099-B, Form 1099-MISC, Form W-2G or, under some interpretations, no federal information return covering the event-contract payment itself. A platform’s decision to issue a particular information return does not necessarily settle the taxpayer’s substantive federal tax treatment. Regulatory classification, platform terminology, information reporting and federal income-tax characterization are related questions, but they are not interchangeable.
Our Prediction Market Taxes 2026 guide addresses the broader federal characterization framework separately. Keeping those analyses separate is particularly important while direct IRS guidance remains limited.
Understanding the Major Forms
The forms that can appear around prediction market activity have different reporting functions. Understanding what the form actually reports is more useful than treating every 1099 associated with the account as a prediction-market trading form.
Form 1099-B
Form 1099-B operates within the broker-reporting rules of §6045. For prediction markets, the difficult question is whether a particular event contract and transaction fall within those existing rules. There is not currently a universal answer.
One possible analysis involves §1256. Trading on a qualifying exchange can be relevant to certain §1256 categories, but exchange status alone is not enough. Tax payesr should not assume every event contract belongs on Form 1099-B simply because it trades on a regulated exchange, and should not assume the absence of Form 1099-B resolves the underlying tax treatment.
The substantive §1256 question is broader than the information reporting issue addressed here. See our separate analysis of Section 1256 and Prediction Markets.
Forms 1099-MISC and 1099-INT
Interest, rewards and other payments associated with an account can have their own reporting treatment. If the 1099-MISC reports a reward or credit, reconcile that payment to the account records. The same principle applies to Form 1099-INT. Interest can be earned within the same commercial relationship as prediction-market trading while remaining a separate item.
Liquidity incentives and rebates can also require analysis apart from the event contracts themselves. See our guide to Prediction Market Maker Rebates for that issue.
Form 1099-DA
Form 1099-DA reports specified digital asset transactions. A trader may have a reportable digital-asset transaction alongside event contract activity. Those transactions can be economically connected without becoming the same transaction for federal tax purposes.
The presence of Form 1099-DA therefore does not establish the federal tax character of the event contract. It tells the taxpayer that a digital-asset transaction has entered the information-reporting process. The separation becomes particularly important for crypto connected and on-chain prediction markets, where stablecoin transactions, wallet movements and event-contract activity may need to be reconstructed together while remaining distinct for tax purposes.
Form W-2G
Form W-2G reports specified gambling winnings. Its relevance to prediction markets depends on the underlying wagering analysis. If an event-contract payment is properly subject to wagering treatment and meets the applicable reporting requirements, W-2G can become relevant. If the contract is not treated as a wager, a different reporting analysis applies.
The form itself should not be used as circular proof of the substantive characterization.
When No 1099 Is Issued
Receiving no 1099 does not mean the taxpayer has nothing to report. It also does not necessarily mean a tax form is missing. Whether a third party has an information-reporting obligation and whether the taxpayer has income, gain or loss to report are separate questions.
A separately reportable payment may fall below an applicable reporting threshold. A transaction may fall outside a particular information-reporting regime. A platform may provide an annual statement or P&L rather than a federal information return covering the trading activity. And, depending on the underlying transaction and characterization, existing federal rules may not require a 1099 for the event-contract settlement itself.
A taxpayer cannot omit otherwise reportable activity merely because no 1099 arrived.
Reconciling Tax Documents
For an active prediction market trader or trading firm, year-end reconciliation should begins with the taxpayer’s own accounting records.
Those records should be supported by sufficiently detailed transaction data to establish the activity during the year. Depending on the operation, that can include trades, settlements, fees, rebates, interest, deposits and withdrawals, and other activity necessary to maintain complete books and records.
The venue’s annual P&L or trading statement then provides an important external control. The accounting records should reconcile to the venue’s year-end reporting, with differences identified and explained. Third-party information returns are layered into the process after that.
The transaction records establish what occurred, the accounting records organize that activity into a complete financial record, the venue statement provides a comparison to what the platform reports for the year, forms 1099 and other information returns establish what third parties reported under their applicable reporting regimes. Then the tax return then applies the appropriate tax treatment to the supported activity.
Professional and Multi-Venue Traders
For professional traders, market makers and trading firms, this accounting system becomes particularly important.
A multi-venue operation may receive different documents from different platforms while maintaining its own books. One venue may provide a detailed annual statement and another may provide a P&L. Separate information returns may cover interest, rewards or digital-asset activity. Other trading activity may need to be supported from detailed transaction records.
Not every trader requires a complex accounting system. A taxpayer with a small number of well-documented transactions may have a relatively straightforward reporting process. A trading firm operating across multiple venues, entities and reporting systems can require substantially more reconciliation.
Camuso CPA works with professional prediction market traders, market makers and trading firms on Prediction Market Accounting and Prediction Market Tax Reporting. Our Prediction Market Taxes 2026 guide covers the broader federal tax framework.
Bottom Line
Prediction markets do not currently produce one standard year-end tax package. Some accounts generate 1099s for specific payments or transactions. Others provide annual trading statements or P&L reports. Digital-asset activity can generate separate information reporting. A trader may also receive no federal information return covering the event-contract trading itself.
This article is provided by Camuso CPA for general informational purposes and does not constitute legal, tax, accounting, or investment advice. Tax laws and regulations are evolving rapidly and the information presented may not reflect current guidance. Reading this article does not create a CPA-client relationship. For advice on your specific situation, schedule a consultation with Camuso CPA.
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