IRS Provides No Guidance on Taxing Prediction Market Winnings in US

Prediction market profits have become a major tax conundrum with no official IRS guidance.

“How do you file taxes on prediction market profits”

Ars Technica

Only around 3 percent of the population uses prediction markets, translating to millions obligated to report.

Ars Technica

Kalshi saw over $12 billion in monthly trade volume in March.

Some are applying statutes governing financial derivatives, others treating gains as gambling winnings.

Patrick Camuso described prediction markets as a mix of wagering, derivatives, and investment contracts.

Coinbase is doubling down on prediction markets as part of its Everything Exchange strategy.

The acquisition of The Clearing Company is expected to close in January.

Boursorama

The Clearing Company counts Coinbase Ventures among its investors.

Everything Exchange is a unified platform for trading cryptocurrencies, stocks and everything people want to trade.

The move highlights how event-driven markets are approaching the regulated financial mainstream.

The Clearing Company has asked the CFTC to become a derivatives clearing organization.

“Coinbase to acquire The Clearing Company in its bet on prediction markets”

TradingView

Coinbase identified prediction markets as an important category through 2026.

A Trump proposal would cap the deductibility of gambling losses at 90%.

Coinbase argued prediction markets could emerge as a more tax-efficient alternative.

The tax landscape remains uncertain.