How to Generate a US Tax Statement for Polymarket Trading

Overview

Tax reporting for prediction markets is harder than for spot trading, and not for the reason people expect. The difficulty is not volume. It is that a position can end three different ways, and only one of them looks like a trade. You can sell shares on the book. You can redeem winning shares after resolution. Or your shares can expire worthless, which produces a realized loss with no transaction anywhere that resembles a sale. Tooling built by reading a fill history catches the first case, sometimes catches the second, and silently misses the third. That understates losses, which is the direction nobody discovers by accident. This guide pulls dispositions that account for all three, reconciles them, and exports something defensible.

This covers pulling and checking data. It is not tax advice. Rules vary by jurisdiction and by how a taxpayer’s activity is characterised. A qualified preparer should make those calls.

Read time: about 13 minutes. No prior tax engineering experience assumed.

TL;DR

GET /traders/{address}/tax-report gives per-year totals. GET /traders/{address}/statements/r1 gives the line items.
Rows are computed from on-chain settlement records replayed through a share-level FIFO cost-basis engine, not estimated from fills.
Paginate. Missing the tail silently understates gains.
Reconcile with GET /traders/{address}/reconciliation, the R8 certificate.
Do not reconstruct cost basis yourself. Splits, merges, and redemptions are not buys and sells.
503 with available: false means still computing, not failed.

What you will do

Pull a per-year tax summary for a wallet
Pull the underlying Form-8949-style disposition rows, with pagination
Run two independent reconciliation checks before trusting the numbers
Understand the three ways a position ends and why the third is easy to miss
Handle the processing state for wallets with long histories
Export to CSV without reintroducing rounding error

What you will need

Knowledge

Comfort with paginated APIs and CSV export
No tax expertise required to follow the mechanics

Tools and access

A Bravado API key. Data API reads work on any public wallet, so you can run this against an address you do not control.
Python with requests

export BRAVADO_API_KEY="your-bearer-token"
export BASE="https://bravado-api-k7kaq.ondigitalocean.app"

Start with the summary

curl -G $BASE/traders/0xWALLET/tax-report \
  -H "Authorization: Bearer $BRAVADO_API_KEY" \
  -d year=2025

Per-calendar-year totals: short-term and long-term capital gains, income by kind, and capital flows. This is the number that ends up on a return. Everything below exists to support it.

Then the line items

curl -G $BASE/traders/0xWALLET/statements/r1 \
  -H "Authorization: Bearer $BRAVADO_API_KEY" \
  -d year=2025 -d limit=500

Each row is a closed lot: acquisition date, disposition date, proceeds, cost basis, and the resulting gain or loss. That is the Form 8949 shape, which is why a preparer can work from it directly.

Use the standalone /statements/r1 endpoint rather than the full /statements response for active wallets. The complete §20 statement carries all eight reports (R1 through R8) and gets large quickly. R1 is the only one most tax workflows need.

Paginate properly

Disposition sets run long, and a truncated pull is worse than no pull because it looks complete.

import os, requests
from decimal import Decimal

BASE = "https://bravado-api-k7kaq.ondigitalocean.app"
H = {"Authorization": f"Bearer {os.environ['BRAVADO_API_KEY']}"}


def dispositions(address, year):
    rows, cursor = [], None

    while True:
        params = {"year": year, "limit": 500}
        if cursor:
            params["cursor"] = cursor

        r = requests.get(f"{BASE}/traders/{address}/statements/r1",
                         headers=H, params=params, timeout=60)

        if r.status_code == 503 and not r.json().get("available", True):
            raise RuntimeError("statement still processing, retry shortly")

        r.raise_for_status()
        page = r.json()
        rows.extend(page["rows"])

        cursor = page.get("next_cursor")
        if not cursor:
            return rows

Raising limit is not a substitute for following the cursor. Follow next_cursor until it is absent, or you will confidently report a partial year.

Reconcile before you file

This is what makes the output defensible rather than merely available.

The R8 certificate

curl -G $BASE/traders/0xWALLET/reconciliation \
  -H "Authorization: Bearer $BRAVADO_API_KEY" \
  -d year=2025

R8 verifies the statement is internally consistent: that the reports agree with each other and with the underlying settlement data. It exists precisely so a third party does not have to take the numbers on trust.

Two checks of your own

Line items should sum to the summary

Total gain_loss across R1 rows should match the capital gains in the tax report. A mismatch almost always means a missed page or a year filter that differs between the two calls.

Every disposition should trace to an event

Cross-check against GET /traders/{address}/trades for the period. Every disposition should correspond to a sale, a redemption, or an expiry. Anything that traces to nothing is worth asking about before filing.

rows = dispositions("0xWALLET", 2025)
line_total = sum(Decimal(r["gain_loss"]) for r in rows)

report = requests.get(f"{BASE}/traders/0xWALLET/tax-report",
                      headers=H, params={"year": 2025}).json()
summary_total = Decimal(report["short_term_gain"]) + Decimal(report["long_term_gain"])

print(f"{len(rows)} dispositions")
print(f"  line items: {line_total:>14,.2f}")
print(f"  summary:    {summary_total:>14,.2f}")
print(f"  match:      {line_total == summary_total}")

Expected output:

1,284 dispositions
  line items:      12,481.37
  summary:         12,481.37
  match:      True

If match is False, stop and find out why before anything downstream uses these numbers.

The three ways a position ends

Ending	What happens	Appears as
Sold on the book	Shares sold before resolution	Ordinary disposition at the sale price
Redeemed after resolution	Winning shares claimed at $1	Disposition with proceeds of $1 per share
Expired worthless	Losing shares settle at $0	Disposition with zero proceeds, full loss realized

That third row is the one that matters most, and the one home-grown tooling misses. Nothing about it looks like a trade. There is no counterparty, no fill, no transaction to find in a trade log. The shares simply stop being worth anything when the market resolves against you. It is still a realized loss, and one that is often material, because losing outcomes are the most common way a prediction market position ends.

Do not reconstruct cost basis from the trade log. Splits mint a complete outcome set from collateral; merges destroy one; redemptions convert shares to cash at a fixed price. Treating any of those as ordinary buys and sells produces a basis that disagrees with the chain, and the error compounds with account age. The R1 rows already account for all of it.

Handle the processing state

Tax and PMWAS endpoints compute a wallet’s full history on first request. For a long-lived wallet that takes a while.

def dispositions_with_wait(address, year, tries=10, delay=30):
    for _ in range(tries):
        try:
            return dispositions(address, year)
        except RuntimeError:
            time.sleep(delay)      # still computing, not failed
    raise TimeoutError("statement did not become available")

A 503 with available: false is a state, not an error. Surface it as “preparing your statement” rather than a failure, and poll on a sane interval.

Export

import csv

FIELDS = ["acquired_at", "disposed_at", "asset", "quantity",
          "proceeds", "cost_basis", "gain_loss", "term"]

with open("dispositions-2025.csv", "w", newline="") as f:
    w = csv.DictWriter(f, fieldnames=FIELDS, extrasaction="ignore")
    w.writeheader()
    w.writerows(rows)

Keep values as strings on the way out. Converting to float for a CSV reintroduces exactly the rounding error the FIFO engine exists to avoid, and a preparer reconciling your export against the API will find the discrepancy before you do.

Wrapping up

Two calls give you the numbers, one gives you the proof, and two checks of your own make it defensible. The conceptual point worth carrying: a prediction market position ends three ways, and the most common one leaves no trace in a trade log. Any tax tool built on fills alone will understate losses. That is the reason to use derived dispositions rather than rolling your own.

Frequently asked questions

Why not compute cost basis from the trade history myself?

Because splits, merges, and redemptions are not buys and sells. A split mints a complete outcome set from collateral, a merge destroys one, and a redemption converts shares at a fixed price. Treating them as trades produces a basis that drifts further from reality the longer the account has been active.

My line items do not sum to the summary.

Almost always a missed page or a mismatched year filter. Confirm you followed next_cursor to the end and that both calls used the same year.

What is the R8 certificate for?

It verifies the statement is internally consistent, so a preparer or auditor can check the numbers rather than trusting them. Useful whenever someone other than you has to accept the output.

Why does a losing position appear as a disposition?

Because it is one. The shares settled at $0 and the loss is realized, even though no sale occurred. Omitting it understates losses.

The endpoint returned 503. Is something broken?

No. available: false means the wallet’s history is still being computed, which happens on first request for wallets with long histories. Poll rather than failing.

Can I run this for a wallet I do not control?

Yes. Every Data API read works on any public address, with no permission from the owner and no funded account of your own.

Resources

Tax report endpoint, per-year summary reference
R1 dispositions, line item reference
R8 reconciliation, certificate reference
Data API, the accounting model behind these numbers
Display positions and PnL, realized versus unrealized
Numeric conventions, why values are strings
Pagination, cursor behaviour on large statements

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How to Generate a US Tax Statement for Polymarket Trading

Overview

TL;DR

What you will do

What you will need

Start with the summary

Then the line items

Paginate properly

Reconcile before you file

The R8 certificate

Two checks of your own

The three ways a position ends

Handle the processing state

Export

Wrapping up

Frequently asked questions

Resources

​Overview

​TL;DR

​What you will do

​What you will need

​Start with the summary

​Then the line items

​Paginate properly

​Reconcile before you file

​The R8 certificate

​Two checks of your own

​The three ways a position ends

​Handle the processing state

​Export

​Wrapping up

​Frequently asked questions

​Resources

Overview

TL;DR

What you will do

What you will need

Start with the summary

Then the line items

Paginate properly

Reconcile before you file

The R8 certificate

Two checks of your own

The three ways a position ends

Handle the processing state

Export

Wrapping up

Frequently asked questions

Resources