Phantom Prediction Market Taxes: Kalshi & Crypto

Last Updated on November 6, 2026 by Patrick Camuso, CPA

Crypto funding, Kalshi trades and federal tax reporting through Phantom.

Quick Answer

Trading Kalshi event contracts through Phantom can create records across several systems. A customer may fund a purchase with Phantom Cash or supported Solana tokens, execute the event contract through a linked Kalshi account and later receive proceeds through Phantom Cash.

Those steps should be reconciled separately. A wallet transfer establishes that assets moved. The Kalshi records establish whether a contract was actually purchased, sold or settled. Phantom Cash records show amounts later received.

Crypto funding can also create a separate federal tax issue. If SOL or another digital asset is sold or exchanged during the funding process, that transaction may require its own gain or loss analysis before the event contract is considered.

Phantom also uses Solana outcome tokens in connection with the U.S. product. Its current public materials describe both Kalshi settlement activity and outcome token functionality. The records should preserve the Kalshi position, related token activity and resulting CASH receipt without assuming a separate tax result from the token record alone.

How Phantom’s Kalshi Integration Works

Phantom began rolling out U.S. access to Kalshi event contracts in October 2026.

The launch followed CFTC Staff Letter No. 26-09, which provided conditional staff no action relief for specified Phantom activities. Phantom’s current disclosures state that Phantom itself is not the exchange or clearing organization for the contracts.

Under Phantom’s October 23 U.S. announcement, customers create or link a Kalshi account and complete the applicable verification process. Kalshi maintains the underlying trading relationship and executes the event contract transactions.

Phantom provides the customer interface, wallet functionality and funding experience.

The U.S. integration should be analyzed using Phantom’s current U.S. specific materials. Phantom also publishes documentation for other prediction market products and integrations that use different structures.

Phantom Cash and Crypto Funding

Phantom’s U.S. trading instructions allow eligible customers to use Phantom Cash or supported Solana tokens to fund prediction market activity.

Phantom Cash holds CASH, a USD pegged stablecoin on Solana. Phantom’s Cash documentation explains that the Cash account uses a separate blockchain address from the customer’s primary Phantom wallet.

A customer may therefore have records involving a primary crypto wallet, Phantom Cash and a linked Kalshi account. Those records should be reconciled according to the activity each system documents.

The wallet history shows the digital assets transferred. Kalshi records establish the event contracts actually executed. Phantom Cash records show CASH activity before and after the trade.

Funding Does Not Establish That a Contract Was Purchased

Phantom’s current support materials describe situations in which funds can reach Kalshi before the intended purchase completes.

A quoted price may expire during the funding process. If the order does not execute, available funds can be returned through the applicable payment process.

The Kalshi execution history should determine whether the contract was acquired and in what quantity. Where no execution occurred, the accounting should retain the funding and return activity without creating an event contract position.

Any digital asset transaction completed during funding should still be reviewed separately.

This is one of the most important recordkeeping issues in the integration. A wallet outflow alone is not sufficient to establish a Kalshi purchase.

Contract Cost Can Differ From the Funding Amount

The amount leaving a Phantom wallet may differ from the amount ultimately applied to an event contract purchase.

The transaction can include digital asset conversions, network charges, platform fees, exchange fees or unused funds. Partial or failed executions can create additional differences.

The records should connect the asset used for funding with the value delivered to Kalshi, transaction costs, contracts actually acquired and any amount later returned.

For material activity, this reconciliation should be performed from the underlying transaction records rather than from the gross wallet movement.

Match Incoming CASH to the Kalshi Activity

Phantom’s troubleshooting guidance explains that an incoming Cash transfer may follow several different events.

It may represent unused funds from a failed purchase, proceeds from selling a position or an amount received after a market settles.

The underlying Kalshi record should identify which event occurred.

For a sale, retain the contracts sold, quantity, price and fees. For settlement, retain the market resolution and contractual payment. For a failed purchase, retain the original funding attempt and the records showing that the intended contract was not acquired.

Phantom also explains that proceeds can become available in the Kalshi linked account before reaching Phantom Cash. The Kalshi sub account may therefore be relevant when reconciling timing differences or amounts in transit.

Outcome Tokens Should Remain Part of the Source Record

Phantom represents positions acquired through the U.S. integration with Solana SPL outcome tokens.

Those token records should be reconciled with the corresponding Kalshi positions. A blockchain record and a Kalshi position record may reflect different aspects of the same trading activity.

Phantom’s current U.S. materials describe both Kalshi settlement activity and functionality involving outcome tokens. The public documentation does not fully explain the legal or tax significance of every token transfer or redemption.

For tax and accounting purposes, preserve the Kalshi position and settlement records, related outcome token activity and the CASH ultimately received.

That record allows the transaction to be analyzed from the actual mechanics without assigning a separate tax treatment to the outcome token based only on its appearance on Solana.

Settlement and Cash Receipt May Occur at Different Times

Phantom states that a completed sale or winning result may appear before the related funds reach Phantom Cash.

That timing can matter around month end or year end.

The records should preserve the relevant Kalshi transaction or settlement date, amounts remaining available or in transit and the later Cash receipt.

The applicable recognition period depends on the transaction, the taxpayer’s method and the relevant accounting and tax rules.

Our Prediction Market Month end Close guide discusses the broader reconciliation of executions, positions, settlements and account balances.

Crypto Funding May Create a Separate Tax Transaction

The IRS generally treats digital assets as property for federal income tax purposes.

Where the Phantom funding process includes a sale, exchange or other taxable disposition of SOL or another digital asset, the taxpayer may need to determine gain or loss on that transaction.

The wallet and conversion records should establish what occurred.

For example, a taxpayer could use appreciated SOL in a funding transaction and subsequently acquire a Kalshi event contract. The SOL transaction and the event contract purchase should remain separately supportable in the tax records.

Phantom’s public materials establish that supported Solana tokens can be used as funding sources. The actual transaction records should be used to determine how a particular token was converted or transferred.

For taxpayers who need to reconstruct the basis of digital assets used for funding, our Crypto Cost Basis Reconstruction Guide discusses the required records in greater detail.

Failed Orders Can Still Leave Digital asset Transactions

A failed Kalshi order should be analyzed separately from any digital asset transaction that occurred during funding.

If a digital asset was sold or exchanged before the order failed, that transaction may remain relevant for federal tax purposes.

The records should establish what asset left the wallet, what conversion occurred and what property was later returned.

A returned CASH balance may not represent a return of the same digital asset originally used for funding.

Phantom Cash Records

CASH is a USD pegged stablecoin on Solana. IRS digital asset guidance generally includes stablecoins within the digital asset framework.

Sales or exchanges of CASH can require basis and gain or loss analysis. Transfers between accounts under continuing common ownership should be identified as transfers where the facts support that treatment.

Where CASH remains close to one dollar, any economic gain or loss may be small. The records remain useful for supporting basis, proceeds and account reconciliation.

Network Fees and Transaction Costs

Phantom’s U.S. materials describe network and platform costs associated with different funding methods.

The treatment of a fee depends on the transaction it relates to. Current IRS digital asset guidance distinguishes transaction costs incurred in connection with digital asset purchases and dispositions from costs incurred solely to transfer assets between a taxpayer’s own accounts.

Fees should be matched to the relevant funding, digital asset transaction or event contract trade before their federal treatment is determined.

How Are the Kalshi Contracts Taxed?

The underlying Kalshi event contract requires its own federal tax analysis.

Relevant facts include the particular contract, taxpayer capacity and how the position was acquired and concluded. Potentially applicable provisions can include IRC §§1221, 1234A, 1256, 165(d) and 475.

Section 165(d) may require consideration for particular contracts. The analysis depends on the contract and transaction under the applicable federal authorities.

Where §165(d) does not govern, general rules applicable to contractual property may require consideration. A position sold before resolution can present different questions from a contract held through settlement. Section 1234A may also be relevant where its statutory requirements are satisfied.

Section 1256 requires analysis of the particular instrument and statutory category. Kalshi’s exchange status is one relevant fact within that analysis.

Section 475 can apply to qualifying dealers and, through elective regimes, qualifying traders or dealers in specified instruments where the statutory and election requirements are satisfied.

Our Prediction Market Tax Guide examines these characterization questions in greater depth.

What Tax Records Do Phantom and Kalshi Provide?

Phantom and Kalshi each provide source information that can assist with reconstruction.

Phantom records can show funding, prediction market activity, outcome tokens and Cash movements. Kalshi maintains the underlying execution, position and settlement records for the U.S. account.

Kalshi’s tax documentation guidance discusses information returns for several categories of account activity, including interest, credits and rewards, crypto transfers and digital asset transactions. Those descriptions should be applied to the transactions they actually cover.

The public materials reviewed for this article do not establish how every Phantom linked event contract transaction or outcome token record will appear in year end information reporting.

Taxpayers should preserve the underlying activity even where a particular information return is not furnished.

For material activity, the workpapers should connect the original funding source, any digital asset conversion, fees, Kalshi executions, position history, outcome token records and amounts ultimately received through Phantom Cash.

Our Prediction Market Accounting Guide discusses these reconciliation requirements in greater detail.

Final Thoughts

Phantom gives U.S. users a single interface for funding and trading Kalshi event contracts, while the supporting records can remain distributed across Phantom, Solana and Kalshi.

For material activity, preserve the digital assets used for funding, Kalshi executions and positions, fees, settlement information, outcome token records and CASH received.

Those records provide the factual basis for analyzing both the digital asset activity and the event contracts under the applicable federal tax rules.

Frequently Asked Questions About Phantom and Kalshi Taxes

Can you trade Kalshi prediction markets through Phantom?

Yes. Phantom began rolling out its U.S. Kalshi integration in October 2026. Eligible users can create or link a Kalshi account and access qualifying markets through Phantom.

Is buying a Kalshi contract with SOL taxable?

The funding process may include a taxable sale or exchange of SOL. The wallet and conversion records should establish what occurred. The event contract requires separate analysis.

Is Phantom Cash U.S. dollars?

Phantom Cash holds CASH, a USD pegged stablecoin on Solana.

What happens if a Phantom prediction market purchase fails?

Funds may reach Kalshi before an order fails. The Kalshi records should establish whether any contract was actually acquired. Any separate digital asset transactions completed during funding should also be reviewed.

Are Phantom outcome tokens separately taxable?

The public materials do not establish one tax treatment for every outcome token transaction. Preserve the Kalshi position, token activity and settlement records so the actual transaction can be evaluated.

How are Kalshi proceeds received through Phantom taxed?

The treatment depends on the underlying contract and how the position was concluded. The Kalshi records and subsequent Cash receipt should be reconciled before the federal treatment is applied.

Do Phantom and Kalshi provide all the records needed for taxes?

They provide important source records. Material activity may require records from the Phantom wallet, Cash account, linked Kalshi account, executions, positions, outcome token activity, fees and returned payments.

Prediction Market Accounting and Tax Services

Camuso CPA provides accounting and federal income tax services for taxpayers with material prediction market and digital asset activity.

Where Phantom and Kalshi records are incomplete or do not reconcile, the work may begin with Prediction Market Accounting and transaction reconstruction.

Where the transactions are established but the federal tax treatment requires additional analysis, contract specific tax research may be appropriate.

Learn more about our Prediction Market Tax and CPA Services.