Coinbase Funds Transfer to Paypal- Will 1099 be issued?

[PippinTook]

After a few transfers from Coinbase to Paypal in the past month, I can see Paypal has listed/coded the transactions as "Mass Pay Payment: Coinbase Inc." in my paypal statement.

Will this cause me to receive 1099 from paypal for what is merely a transfer of my own funds from a third party to paypal? I understand that the exception is usually friends and family payments tend to be listed as "general payments" and are exempt from inclusion in a 1099. 

Mass payments often are businesses and seem like they would be included. In this case however, Coinbase is a financial services organization and anyone transferring in from there is just moving their own funds.

Will paypal make the right distinction and not issue a 1099 in this case? Or will they not know the difference? Can someone escalate this concern to the paypal team so that this doesn't cause a major problem for any users who used this flow without knowing?

Thanks

[sharpiemarker]

@PippinTook 

It “might” be reported on the 1099-K. Many other platforms (surveys, rebate sites, etc) use masspay too and some have reported to be included in 1099-k.

Consult a tax professional if this happens to help you report it properly on your tax return.

Not all income on the 1099-k is taxable or maybe reported in a different way like say capital gains that happened to be reported on the 1099-k in your case. 1099-k from payment processors to the IRS is essentially an information report but tax payers can use it to report taxable/non-taxable income with it.

[PippinTook]

As a follow up- yes I understand the ambiguity inherent in a 1099- still is there a channel to escalate this to Paypal team & find out how they code Coinbase deposits as?

From what I can tell every company is potentially coded differently- some trigger 1099 and some don't- it would be a trivial matter for Paypal to address the situation and tell us how Coinbase as a financial services organization is coded on their platform and then FIX it if its going to create 1099s for non goods and services transactions.

This will contradict the Paypal Terms and Services which maintains that 1099 is only triggered for the sale of goods and services- money transfers are obviously not within that category.

Thank you.

[Leo1095]

Looks loke IRS will get a 1099k for all transactions