Tax classification of Kalshi Bitcoin perpetual futures remains uncertain

Traders face uncertainty regarding the tax treatment of Bitcoin perpetual futures on Kalshi after the CFTC approved the product as a futures contract. While the CFTC classifies it as a futures product, CME argues it functions as a swap, which would exclude it from the favorable tax treatment under Section 1256 of the U.S. Tax Code. Until the IRS, Congress, or the courts provide direct guidance, the tax classification remains unresolved.