How your perpetual futures gains and losses are taxed in the US — and what to track before your first trade. Educational background only, not tax advice.
Before your first perpetual futures trade, understand how your gains and losses will be taxed. The answer depends on which exchange you use and what type of contract you're trading — and the difference can be significant.
Two key frameworks apply to perpetual futures in the US:
The CFTC's May 2026 ruling opened regulated perpetual futures to US retail traders for the first time. Contracts traded on CFTC-regulated exchanges (Kalshi, Coinbase, Kraken) may qualify for Section 1256 treatment. Contracts on unregulated offshore platforms generally do not.
This article is educational background only. Tax law on perpetual futures is evolving and unsettled as of June 2026. Consult a licensed CPA or tax attorney before making any tax decisions.
Traditional regulated futures contracts qualify as Section 1256 contracts under US tax law. The key benefits:
Whether CFTC-regulated perpetual futures qualify as Section 1256 contracts is an open legal question as of June 2026. The IRS has not issued formal guidance. Some tax practitioners believe they qualify based on the regulatory structure. Others are cautious. Get professional advice before assuming Section 1256 treatment.
If your perpetual futures trades don't qualify for Section 1256, they're taxed as property — the same framework that applies to spot crypto.
For perpetual futures specifically: most positions are held for days or weeks, not years. Expect short-term treatment under this framework.
Funding payments: when you receive funding payments (shorts receiving from longs during positive funding), those may be treated as ordinary income. When you pay funding, it may be deductible as a trading expense. Treatment is unsettled — track every funding payment.
How funding payments work → How Perpetual Futures Funding Rates Work
Whether Section 1256 or capital gains applies, you need:
For every trade:
For every funding payment:
Most regulated exchanges provide downloadable trade history. Export it at least monthly — don't rely on the exchange keeping records indefinitely.
Cost basis for crypto-settled positions: if your perpetual futures are settled in crypto (not USD), the settlement creates a taxable event at the USD value of the crypto received.
Stock traders know the wash sale rule: sell a stock at a loss and buy it back within 30 days, and you can't deduct the loss. For Section 1256 contracts, wash sale rules don't apply.
For non-Section 1256 perpetual futures treated as property — the IRS hasn't definitively ruled whether wash sale applies, but most practitioners treat crypto property as subject to wash sale. Conservative approach: wait 30 days before reopening a position you closed at a loss.
Perpetual futures taxation is genuinely complex and unsettled. Find a CPA who:
Don't use a general-purpose tax preparer for this. The cost of a specialist is far less than the cost of getting it wrong.
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ChartsMeanCash™ is not a registered investment advisor. All content is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Trading involves substantial risk of loss. Leveraged trading amplifies both gains and losses and is not appropriate for all investors. Hypothetical backtest results referenced on this page are not a guarantee of future performance. Never trade more than you can afford to lose.