Tax reporting for gains tied to Kalshi’s Bitcoin perpetual contracts remains unsettled even after the U.S. Commodity Futures Trading Commission approved the product as a futures contract, according to a post from Bitcoin News on X. The key issue is whether the contract would qualify as a regulated futures contract under Section 1256 of the U.S. tax code. If it does, gains would generally receive 60% long-term capital gains treatment and 40% short-term treatment regardless of how long the position was held. CME has argued that Kalshi’s perpetual contract is effectively a swap, and swaps are explicitly outside the scope of Section 1256. While the CFTC’s classification supports the view that the product is a futures contract, that determination does not bind the Internal Revenue Service. Until the IRS, Congress, or a court directly addresses how Bitcoin perpetual contracts should be taxed, the reporting treatment for traders remains unresolved.
Tax reporting for gains on Kalshi’s Bitcoin perpetual contracts remains uncertain after the U.S. Commodity Futures Trading Commission approved the product as a futures contract, according to a post by Bitcoin News on X.
If the product is treated as a regulated futures contract under Section 1256 of the U.S. tax code, related gains would generally be taxed on a 60/40 basis, with 60% treated as long-term capital gains and 40% as short-term capital gains regardless of holding period.
CME has argued that Kalshi’s perpetual contract is in fact a swap, and swaps are explicitly excluded from Section 1256 treatment. The CFTC’s classification supports the view that the product belongs in the futures category, but that classification is not binding on the Internal Revenue Service.
Until the IRS, the U.S. Congress, or a court directly addresses the tax treatment of Bitcoin perpetual contracts, the issue remains unresolved for traders.
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