I began with a file that contained both ID3V1 and ID3V2 tags. By trial and error I've found that when I use Masstagger's Copy Tags Option in the Right Click Context Menu, only the ID3V1 Tag is copied. If I remove the ID3V1 Tag from the source file, the Copy Tags option is no longer available in the context menu. Am I correct in concluding that Masstagger does not copy ID3V2 tags from one file to another? Or, is there a setup option that I've missed that would allow me to do it?

I'm guessing you have tag writing set to something other then ID3v2.