I have a small amount of money in a paypal account, and they put it into a money market. So now I've got a couple bucks of income to report. Since it's under $10, they didn't provide me with a 1099, so I'm on my own to figure out how to report this. And I'm quite confused. :)
Normally I'd expect this to be reported as interest. But looking at my account history, I see they call this a "dividend" from the PayPal Money Market. And digging further, their prospectus [1] says dividends will be reported on a 1099-DIV which will distinguish between dividends that must be treated as ordinary income and which (if any) are long-term capital gain. So, assuming I don't care about paying the higher tax rate on a dollar of income, it would seem this should be reported on Sch. B as ordinary dividends, or possibly on Sch. D as a capital gain distribution.
But looking to see what the difference is for something to be a "qualified" dividend, I found Pub. 550, which says dividends paid on deposits with a financial institution whould be reported as interest income.
So, what am I supposed to do? Do I report this as interest, ordinary dividend, qualified dividend, or a capital gain distribution? Or not at all, since it's under the $10 minimum to generate a 1099?
Damian
[1]