[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-303796-105":53,"doc-detail-303796-en":118},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":111,"head_meta":113,"extra_data":115,"updated_unix":117},105,"en","potential-tax-implications-for-cftc-sports-events-futures-contracts-high-level-outline","Potential Tax Implications for CFTC Sports Events Futures Contracts - High-Level Outline","","Potential tax implications for CFTC sports events futures contracts focus on how traders may be taxed depending on how the contracts are characterized for federal and/or state purposes. The analysis highlights whether sports futures should be treated as financial instruments or wagers/gambles, then examines the possibility of classification as section 1256 contracts and the resulting mark-to-market regime. If section 1256 treatment does not apply, the document evaluates alternative characterizations, including ordinary income/loss considerations and possible capital-asset treatment.",{"@graph":63,"@context":110},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":41,"@type":70,"position":76},"https://docshare.wps.com/template/letters/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/potential-tax-implications-for-cftc-sports-events-futures-contracts-high-level-outline/303796/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/potential-tax-implications-for-cftc-sports-events-futures-contracts-high-level-outline/303796.png","ImageObject",442,249,{"name":88,"@type":89},"Mia  ","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-01","2026-09-19",true,{"@type":98,"interactionType":99,"userInteractionCount":79},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104],{"name":105,"@type":106,"acceptedAnswer":107},"If a sports futures contract is not treated as a section 1256 contract, what alternative tax treatment is discussed?","Question",{"text":108,"@type":109},"The document considers whether the contract could qualify as an “option” under section 1234, and evaluates whether sports futures could be treated as a novel type of capital asset under section 1221, potentially leading to open transaction treatment until settlement or disposal.","Answer","https://schema.org",{"og:url":78,"og:type":112,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":114,"canonical":78},"index,follow",{"doc_id":116,"site_id":56},303796,1790595332,{"code":4,"msg":5,"data":119},{"doc_id":116,"user_id":120,"nickname":88,"user_avatar":121,"doc_module":9,"category_id":40,"category_name":41,"doc_title":59,"doc_description":61,"doc_content":122,"file_id":123,"file_url":124,"file_type":125,"file_size":126,"view_count":79,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":127,"language":128,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":129,"faqs":130,"seo_title":131,"seo_description":61,"update_tm":132,"read_time":73},687207024478,"https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd","Potential tax implications for CFTC sports events futures contracts  \nThe information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. The information contained herein is not intended to constitute tax advice for any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.  \nIntroduction  \nThe trading of sports events futures contracts has gained popularity, with platforms like Kalshi, Polymarket, and [Crypto.com](Crypto.com) offering them, beginning in conjunction with the 2025 Super Bowl. As with any financial instrument, understanding the tax implications is crucial for futures traders and investors. This document is intended to provide a high-level outline of certain significant tax considerations related to CFTCregulated sports events futures contracts, including potential tax implications if sports events futures contracts were to be considered gambling transactions for federal and/or state purposes.  \nKPMG acknowledges that the legality of CFTCregulated exchanges offering sports event futures isan evolving area, with the CFTC and state gambling regulators currently analyzing such contracts.  \nTax treatment of futures contracts  \n1 Financial instruments or gambles?  \nThe classification of sports futures contracts as either financial instruments or wagers/gambles is crucial for determining their tax treatment. If classified as financial instruments, then the character and timing of income or loss may depend on the characterization of the contract for tax purposes and the status of the holder.  \n2  \nSection1 1256 contracts  \nIf sports futures contracts are viewed as financial instruments, then the first question on the tax analysis is whether these contracts would be treated as section 1256 contracts.  \nGenerally, section 1256 establishes special rules for the recognition of gain or loss on “section 1256 contracts.” Specifically, section 1256 requires that each section 1256 contract held by the taxpayer atthe close of the tax year is treated as sold for its fair market value on the last business day of such tax year. This method of accounting is commonly referred to as “mark-to-market” accounting.  \n1 Any reference in this document to the Internal Revenue Code (the Code) is a reference to the Internal Revenue Code of 1986, as amended. Any reference toa “section”(§) is a reference to a section of the Code. Any reference to Treasury Regulations or “Treas. Reg.” is a reference to Treasury Regulations issued pursuant to authority contained in the Code and published in Title 26 of the U. S. Federal Register.  \n© 2025 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. USCS028645-1A  \nHighlighting Potential Tax Implications for CFTC Sports Events Futures Contracts  \n1  \nAny gain or loss under the mark-to-market method of accounting is treated as 60-percent long-term capital gain or loss and 40-percent short-term capital gain or loss, regardless of the amount of time the taxpayer actually held the contract.  \nFor a contract to be considered a section 1256 contract, it must be traded on a “qualified board or exchange” such as “a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission.”2 With respect to sports futures contracts, it should be mentioned that as of March 2025, both Kalshi and [Crypto.com](Crypto.com) have been granted Designated Contract Market status by the CFTC.  \nIn addition, section 1256 ","cbCainQW2OSgITYx","https://ap.wps.com/l/cbCainQW2OSgITYx","pdf",2467732,6,"English","# Introduction\n## Tax treatment of futures contracts\n### Financial instruments or gambles?\n### Section 1256 contracts\n### Alternative tax treatment: Ordinary income or loss","[{\"question\":\"If a sports futures contract is not treated as a section 1256 contract, what alternative tax treatment is discussed?\",\"answer\":\"The document considers whether the contract could qualify as an “option” under section 1234, and evaluates whether sports futures could be treated as a novel type of capital asset under section 1221, potentially leading to open transaction treatment until settlement or disposal.\"}]","Potential Tax Implications for CFTC Sports Events Futures Contracts - High-Level Outline | PDF",1789807154]