Connect the dots between your Form 8949 entries and the Schedule D lines that drive your federal return. Use this reference while reviewing your PolyTax outputs inside TurboTax, TaxAct, or your CPA’s software.
Short-term section (Part I)
Most Polymarket trades resolve in under a year, so they land in Part I of Schedule D. PolyTax separates these trades into Box C on Form 8949, which corresponds to transactions not reported on Form 1099-B.
Form 8949
Schedule D Line
What goes here
Part I, Box C, Column (d)
1c — Proceeds
Total proceeds from short-term Polymarket trades.
Part I, Box C, Column (e)
1c — Cost or other basis
Aggregate cost basis for the same set of trades.
Part I, Box C, Column (g)
1c — Adjustment
Usually zero for Polymarket unless your CPA adds adjustments.
Subtotal
Line 7 — Net short-term gain/loss
Carry the PolyTax short-term total to line 7 after combining with other short-term activity.
Long-term section (Part II)
If you held shares for more than 12 months, PolyTax creates a separate CSV/PDF tab as Box F on Form 8949. These entries flow to Part II of Schedule D.
Transfer proceeds and cost basis to line 8 (Box F) on Schedule D.
Adjustments (column g) typically remain zero unless you claim Section 1202 exclusions or similar.
Combine with other long-term investments on line 15, then move the net figure to Form 1040, Schedule 1 if applicable.
Tie-outs and reconciliation tips
Match PolyTax subtotals against software output before filing. Differences typically stem from rounding or additional assets.
Keep a copy of the PolyTax “Summary” tab showing both short-term and long-term lines; CPAs use it as a reconciliation worksheet.
If you carry losses forward, confirm the amounts match last year’s Schedule D worksheet to avoid duplicating deductions.
Authored by Elaine Wong, CPA. Updated February 2025 using IRS Schedule D instructions and PolyTax reconciliation data. The mapping reflects how our team prepares returns inside TurboTax, ProConnect, and Drake Tax for Polymarket traders.
This educational content does not constitute individual tax advice. Consult your advisor for personalized planning.
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