Periodic payments between long and short holders of a perpetual futures contract that keep its price near spot. You either pay or receive funding, usually every eight hours.
Funding is separate from the trade. Funding received is ordinary income; funding paid is a cost that, for an investor, is generally not deductible and does not adjust basis in the contract. Records need to split funding from realized trading gains.
Funding received is income. Funding paid is generally not deductible for an investor. Both are tracked separately from the gain or loss on the contract.
Source: No IRS guidance as of September 2026; IRS Notice 2014-21 (property treatment)
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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