| Bartering may very well be the most ancient | | | | Trade dollars or barter dollars are identical to |
| form of trade, and it still goes on today. It is not | | | | actual dollars for tax purposes. When conducting |
| uncommon to find companies bartering services | | | | direct barter, you must report the fair market |
| or goods. Bartering is, unfortunately, taxable. | | | | value of the products or services you received as |
| Bartering is the exchange of goods or services | | | | income on your income tax return. |
| without the exchange of cash. Goods and | | | | Barter should be treated as a professional |
| services are simply traded, one in return for the | | | | business activity, with bookkeeping and receipts |
| other. Any professional or business owner can | | | | on hand. You should work with a reputable barter |
| participate in bartering. However, when you | | | | exchange and contact the IRS if you have any |
| barter, you must consider the fair market value | | | | questions related to barter. If you have failed to |
| of the items or services bartered as income. | | | | report barter income, you can file an amended |
| Barter can be handled on a one-on-one basis | | | | return. If you receive income from bartering, you |
| between businesses or individuals, or it make take | | | | might have to pay estimated quarterly taxes. |
| place through the services of a barter exchange | | | | If you barter business assets, you might have to |
| company. | | | | report ordinary gains, capital gains, or depreciation |
| There are all sorts of tax liabilities possible in a | | | | recapture. Appreciated assets can include |
| barter exchange, from self-employment tax, | | | | collectibles, antiques, and art. If you have had |
| employment tax, and income tax, to excise tax. | | | | barter transactions where the fair market value |
| Your bartering could result in capital gains, | | | | of the property is more than your cost or other |
| non-deductible personal loss, capital losses, or | | | | basis, you may have reportable gains. These could |
| ordinary business income. | | | | be business income or capital gains. |