Last Updated on October 3, 2026 by Patrick Camuso, CPA
Quick answer
The short answer: Interactive Brokers currently gives eligible U.S. clients access to event contracts from ForecastEx, Kalshi and CME Group through one brokerage account. That does not make those contracts one tax product. The underlying venue, contract structure, transaction mechanics and reporting still have to be identified before federal tax treatment can be determined.
What matters first: IBKR’s May 2026 event-contract disclosure states that most event contracts are classified as swaps under CFTC rules, while certain CME event contracts are cash-settled, European-style, premium-style options on CME-listed futures. For CME contracts, IBKR specifically instructs customers to use the product code to determine whether the contract is a swap or a futures option
What the reporting does not answer: Interactive Brokers has established brokerage reporting, consolidated Forms 1099 and separate reporting procedures for contracts that qualify for Section 1256 treatment. Its current public materials do not provide a prediction-market-specific matrix assigning ForecastEx, Kalshi activity routed through IBKR and every CME event-contract family to a particular 2026 tax form or federal tax treatment. The 2026 year-end tax documents also have not yet been issued.
How Interactive Brokers Prediction Markets Work
Interactive Brokers has brought several prediction-market venues into one trading environment. Eligible clients can search, compare and trade contracts from ForecastEx, Kalshi and CME Group through an existing IBKR account without opening and separately funding an account at each exchange. IBKR also provides consolidated position tracking and reporting within the broader brokerage relationship. That structure is useful operationally because the customer sees one account. Underneath the account, however, the contracts remain venue-specific products.
ForecastEx is the clearest example of the distinction between IBKR and the underlying market. Interactive Brokers LLC is a CFTC-registered futures commission merchant and a clearing member and affiliate of ForecastEx. ForecastEx itself is registered as both a designated contract market and derivatives clearing organization. Kalshi has a different structure. KalshiEX LLC is the designated contract market. Kalshi Klear LLC is the affiliated derivatives clearing organization under Kalshi’s current structure. Kalshi states that MIAXdx had cleared Kalshi contracts for the prior three years and that Kalshi began moving clearing to Kalshi Klear following regulatory approval in 2026. IBKR presents CME Group as one of the three prediction-market sources in the customer interface, but CME Group operates multiple designated contract markets. IBKR’s API documentation notes that the actual exchange value can be CME, CBOT, COMEX or NYMEX depending on the contract.
As of October 3, 2026, IBKR’s current customer-facing Prediction Markets page identifies ForecastEx, Kalshi and CME Group. We did not find a current IBKR customer-facing source establishing a fourth prediction market venue available through the same retail interface. IBKR does list Polymarket in a separate disclosure containing links to derivatives clearing organization rules. That disclosure expressly states that inclusion of a DCO on the list does not mean a particular account is eligible to clear any or all products on that DCO.
One IBKR Account Can Hold Different Types of Event Contracts
The most important product distinction comes directly from IBKR. Its states that most event contracts are classified as swaps under CFTC rules. It separately identifies certain CME event contracts as cash-settled, European-style, premium-style options on CME-listed futures. IBKR describes the products as economically similar but differently classified under CFTC rules. That is a meaningful fact about the contracts but it is not a federal income tax conclusion.
Federal tax law applies its own definitions. Section 1256, for example, covers specifically defined categories that include regulated futures contracts and nonequity options. It also contains an exclusion for specified types of swaps and similar agreements. Whether a particular event contract fits one of those federal tax categories requires analysis under the Internal Revenue Code. A CFTC product label can be relevant to that analysis without deciding it. The same principle applies in the other direction. A CFTC classification, DCM status or exchange name can be relevant to the tax analysis without deciding it.
This is consistent with the analysis in our Prediction Market Tax Guide, which addresses the broader capital, ordinary, wagering, Section 1256 and taxpayer-specific questions without assigning one treatment to every prediction market contract. Camuso’s current tax guide emphasizes that information reporting does not itself determine the federal characterization of an event contract.
ForecastEx Contracts Through Interactive Brokers
ForecastEx has contract mechanics that should be understood before the tax analysis begins. Under ForecastEx’s current 2026 rulebook, a Forecast Market contains separate Yes and No positions. Participants submit bids from $0.01 to $0.99. When compatible Yes and No bids reach a combined $1.00, ForecastEx creates the contracts, with each participant entering into a Forecast Contract with ForecastEx. At resolution, the contract associated with the correct outcome receives $1 and the other receives zero. The contracts are then extinguished through the clearing process.
ForecastEx also has a specific pre-resolution offset process. A participant cannot continue to hold both Yes and No positions in the same Forecast Market. If an execution creates offsetting positions, the positions are cancelled through the clearing process and the member account is credited $1 for each offset pair. A contract held through final resolution and a contract extinguished through an offsetting position represent different transaction facts. The applicable federal tax consequences still have to be determined under the relevant tax framework, but that analysis should begin with an accurate description of what happened.
ForecastEx Incentive Coupon Tax and Accounting
ForecastEx’s contract materials state that Forecast Contracts can earn a monthly Incentive Coupon based on the contract’s daily settlement value. The ForecastEx rulebook separately addresses the investment of member funds, while individual contract materials explain the coupon feature applicable to those contracts. For accounting purposes, the cleaner starting point is to preserve the Incentive Coupon separately from the gain or loss generated by the Forecast Contract. Whether that payment is ultimately treated as interest, another form of income or under a different framework depends on the relevant facts and authorities. The same issue arises elsewhere in professional prediction markets. Camuso CPA’s analysis of prediction-market maker rebates, liquidity incentives and platform payments explains why platform terminology alone should not determine federal treatment.
Kalshi Contracts Through Interactive Brokers
Kalshi’s current tax-document guidance identifies Form 1099-INT for certain interest payments, Form 1099-MISC for certain credits or rewards, Form 1099-B for specified crypto-transfer transactions and Form 1099-DA from ZeroHash for digital-asset transactions. It also provides a downloadable P&L statement to direct Kalshi users. They do not establish that a customer accessing Kalshi contracts through Interactive Brokers will receive the same forms from the same parties or see the transactions reported in the same manner. For an IBKR customer, the reporting analysis starts with the records and tax documents actually furnished through the IBKR brokerage relationship. Kalshi’s direct-account guidance remains useful for understanding Kalshi’s own systems, but it should not be substituted for evidence about intermediated IBKR activity.
This is one reason prediction market information reporting needs to be analyzed separately from federal characterization. Our Prediction Market Tax Reporting guide addresses that distinction in more detail.
CME Prediction Markets Through Interactive Brokers
CME Group currently maintains a Prediction Markets offering that includes Event Contract Swaps. Its customer-facing materials describe contracts generally priced from $0.01 to $0.99, with a $1 payout if the selected outcome occurs and zero if it does not. CME also publishes current event-contract swap listings and product documentation. At the same time, IBKR states that certain CME event contracts are premium-style options on CME-listed futures rather than swaps under the CFTC classification it describes. That becomes particularly important when Section 1256 is being considered. The fact that CME operates a designated contract market is part of the factual environment. It does not eliminate the statutory requirement that the actual contract fit within an applicable Section 1256 category.
For the deeper federal analysis, see Section 1256 and Prediction Markets. The Camuso analysis specifically distinguishes venue regulation from the separate statutory contract requirements.
How IBKR Classifies Prediction Markets in Its API
IBKR’s Web API uses existing derivative workflows to model event contracts. It explains that ForecastEx products are modeled as index options and that CME event contracts covered by that documentation are modeled as futures options. For ForecastEx, IBKR creates an artificial underlying index so the contracts can operate within the existing option-oriented discovery system
Interactive Brokers Prediction Market Fees
IBKR’s current fee schedule also distinguishes among the three contract families. ForecastEx Forecast Contracts currently carry no IBKR commission plus a $0.01 per-contract exchange fee. Kalshi and CME event contracts currently carry a $0.01 IBKR charge plus a $0.01 third-party exchange fee per contract. IBKR’s current prediction-market fee schedule should be checked for future changes. At low volume, those amounts may be immaterial. At professional scale, transaction fees can become a meaningful component of the trading record.
They should remain identifiable until the applicable accounting and tax treatment has been established rather than disappearing into an unexplained annual platform P&L.
What Records Does Interactive Brokers Provide for Prediction Markets?
Its annual reporting includes trade detail, realized and unrealized gain and loss information, fees, interest and other account activity. IBKR also provides downloadable Activity Statements and customizable Flex Queries that can support more granular reconciliation. Its year-end reporting materials state that annual statements are available through Client Portal and remain accessible for several years.
For prediction-market accounting, those brokerage records establish what occurred in the account. The underlying exchange documentation shows what the product was and how the contract operateed? A complete year-end record may require both. That is particularly important where product identity, an offset transaction, settlement mechanics, fees or an incentive coupon could affect the tax analysis.
This is the broader accounting challenge addressed in our Prediction Market Accounting Guide. The guide explains why platform records can be useful source data without necessarily constituting a complete accounting or tax record.
What Tax Forms Does Interactive Brokers Provide for Prediction Markets?
Interactive Brokers issues applicable U.S. Forms 1099 in a consolidated format. Its current U.S. year-end tax-form guidance states that information on the consolidated Form 1099 is also reported to the IRS. The consolidated statement can include Forms 1099-INT, 1099-OID, 1099-DIV, 1099-B and 1099-MISC, among other reporting.
IBKR’s Form 1099-B documentation also addresses Section 1256 transactions. Its year-end reporting materials state that IBKR provides a Gain/Loss Worksheet for Section 1256 Contracts and describe the categories of contracts that may qualify for that treatment. For 2026 activity, the final year-end forms also do not yet exist. The actual forms should be reviewed when issued rather than inferred in advance from the product name.
A Form 1099 is part of the reporting record. It may be highly relevant to preparation of the return and should be reconciled to the underlying activity. The federal characterization question still depends on the applicable tax law and the actual transaction. That separation between information reporting and tax characterization is central to our Prediction Market Tax Reporting guidance.
Are Interactive Brokers Prediction Markets Section 1256 Contracts?
Section 1256 defines specific categories of qualifying contracts. The statute also excludes identified swaps and similar agreements. IBKR says most event contracts are classified as swaps under CFTC rules, while certain CME event contracts have a futures-option structure. Trading on a designated contract market may be relevant to one element of a statutory test without proving that the contract satisfies every other requirement. The analysis should proceed contract by contract rather than account by account.
How Interactive Brokers Prediction Market Activity May Be Taxed
Current federal authority does not establish one universal tax characterization for ForecastEx, Kalshi and CME event contracts accessed through Interactive Brokers. Depending on the contract, how the position was entered and terminated and the taxpayer’s facts, the analysis may require consideration of capital or ordinary treatment, wagering provisions, Section 1256, trade-or-business rules and other federal tax provisions.
A ForecastEx position extinguished through an offset before resolution does not present exactly the same factual sequence as a contract held until the outcome is determined. Likewise, a particular CME product should be identified before tax consequences are inferred from the venue name.
The accounting needs to preserve enough information to reconcile the trading activity and support the federal treatment ultimately adopted. That does not require treating prediction-market accounting as a novel discipline. It requires applying normal accounting controls to an environment where one brokerage interface can contain multiple product structures.
For firms dealing with high transaction volume, recurring reconciliation or books that do not tie cleanly to the underlying trading records, our Prediction Market Accounting practice covers transaction reconstruction, reconciliation, subledger and general-ledger accounting, period-end close and book-to-tax support.
When Professional Accounting or Tax Help Becomes Relevant
A trader with a modest number of straightforward positions may be able to work from the IBKR records and year-end forms without a specialized accounting engagement.
The analysis becomes more involved when activity spans several contract families, transaction volume is substantial, significant positions remain open at year-end, the taxpayer operates through an entity, incentive payments become material, records do not reconcile or the filing position depends on an unsettled federal characterization question. Those circumstances can create an accounting problem, a tax problem or both.
Where the issue is incomplete or unreconciled transaction data, the work generally begins with the records. Where the records are reliable but the federal characterization remains material and uncertain, separate technical tax analysis may be appropriate. For broader tax characterization and compliance work, see Camuso CPA’s Prediction Market CPA practice. For accounting and transaction reconstruction, see Prediction Market Accounting.
Interactive Brokers Prediction Market Tax FAQ
What prediction markets can I trade through Interactive Brokers?
IBKR currently identifies ForecastEx, Kalshi and CME Group on its U.S. Prediction Markets platform. Product eligibility can depend on the customer and contract, and availability should be rechecked as IBKR adds or changes products.
Does Interactive Brokers issue a 1099 for prediction-market trading?
IBKR issues applicable U.S. Forms 1099 in a consolidated format. Its current public tax materials do not provide a prediction-market-specific matrix stating exactly how every ForecastEx, Kalshi and CME event-contract transaction will be reported for 2026.
Does Interactive Brokers report prediction-market trades to the IRS?
Information included on applicable consolidated Forms 1099 is reported to the IRS. That information reporting does not independently determine the federal tax characterization of the underlying contract.
Are ForecastEx contracts Section 1256 contracts?
Section 1256 treatment should not be assumed from ForecastEx’s regulatory status, IBKR’s FCM status or IBKR’s operational OPT classification. The contract has to satisfy the applicable federal statutory requirements.
Are CME prediction-market contracts automatically Section 1256?
No. IBKR distinguishes among CME event-contract products, and CME currently has swap-based event-contract products. The actual product must be identified before Section 1256 is analyzed.
Are Kalshi contracts taxed differently when traded through IBKR?
The shared IBKR access path does not establish a different or identical federal treatment. What clearly can differ is the reporting relationship. Kalshi’s direct-customer tax-document guidance should not automatically be assumed to describe the tax documents furnished for Kalshi activity accessed through IBKR.
Does IBKR’s OPT or FOP classification determine tax treatment?
No. IBKR uses option-oriented security models as part of its event-contract trading technology. Those classifications are operational metadata and are not independent federal tax authority.
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.
Camuso CPA, PLLC
