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How will the IRS rule regarding prediction market income?
4
Ṁ340Ṁ46
2031
15%
Gambling Income
43%
Capital Gains
22%
Commodity Trading (60% long term capital gains, 40% short term capital gains)
10%
Self employed income
10%
Other

Currently there is no ruling by the IRS on how to treat prediction market income from prediction market exchanges like PredictIt, Betfair, Smarkets, Polymarket, Insight Prediction and others.

This applies to prediction markets that work on the exchange model - where shares are tradeable. It does not apply to fixed odds (sportsbook) type markets which I think the IRS may rule differently.

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Old article that predicts the IRS will go for treating income as forward contracts for commodities and thus tax it as commodities are taxed (the 60/40 method).
https://www.thefreelibrary.com/Predicting+the+taxation+of+prediction+markets.-a0181500075

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