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Bitcoin with PayPal.

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DeltaGee

Member
Joined
Nov 17, 2022
Posts
48
For those who wants to use the Bitcoin through PayPal...

Currently, PayPal only issues 1099-Ks to users if their account proceeds reach $20,000 (of gross payment volume) and includes more than 200 transactions in any year. That is the only reporting PayPal currently does to the IRS. However, as any sales transaction on crypto within PayPal accounts is a taxable event and must be reported.

As for using cryptocurrencies like bitcoin inside of PayPal to buy something, that too is a taxable event (because PayPal first converts crypto into fiat currency, which is itself a taxable event). PayPal’s stance is best summed up with its initial statement:

“It is your responsibility to determine what taxes, if any, apply to transactions you make using your Cryptocurrencies Hub. You can access your transaction history and account statements through your PayPal account for purposes of determining any required tax filings or payments.”

Note you shouldn’t solely rely on this transaction history to prepare your tax return. Each transaction is its own taxable event, even if you use bitcoin to buy a cup of coffee.

To stay out of trouble with the IRS (which can request user account information from PayPal), keep your own thorough records of each purchase, transfer, exchange, and sale of crypto you make.
 

Eyriz

Honorable member
Joined
Sep 9, 2022
Posts
359
PayPal only lets you buy, keep BTC. You can not transfer it or buy anything with it (UK)
 

Flux

Honorable member
Joined
Apr 10, 2013
Posts
241
I am in the USA and sent some BTC to an external wallet for the first time recently. I believe Paypal activated that function a few months ago for USA residents, so it is likely they will roll that out to other countries soon. Please note it took a few days before Paypal allowed me to send my initial BTC purchase to an external source. Not sure if that is a 'know your customer' verification issue or if they just wanted to confirm my ACH bank transfer cleared. I think ACHs take 3 to 5 days to formally clear. Coinbase and Binance have similar holding periods for ACH transfers.
 

cajunbulldog

Eminent member
Joined
Apr 25, 2011
Posts
1,913
Paypal froze my account for violation of tos.?Here's the kicker,never used the account!!
 
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