Bartering

[powerage]

I fixed a friend's computer, got rid of the spyware and a couple of Trojans, installed and configured AV software, locked down their system, and updated everything. I was given a brand new pair of Swiss Gear shoes in return for 3 hours or so of me telling the software what to do.

Normally when I fix a computer, I just get gas, Mt Dew and cigarette money.

Seriously, do I have to report this on my 2012 return? To me, it is a like exchange. I keep a computer safe, and I get a pair of shoes, and things are even.

[JohnH]

Its more or less like that with me with tax preparation. I fix a return, I get a piece of paper with my name and an amount written on it, and things are even. It's sort of like an exchange - do I have to pay tax on that?

Oh and one other thing.
When I try to fix my own computer, I often get gas too.

[veritas]

Swiss gear shoes?

I fixed a friend's computer, got rid of the spyware and a couple of Trojans, installed and configured AV software, locked down their system, and updated everything. I was given a brand new pair of Swiss Gear shoes in return for 3 hours or so of me telling the software what to do.

Normally when I fix a computer, I just get gas, Mt Dew and cigarette money.

Seriously, do I have to report this on my 2012 return? To me, it is a like exchange. I keep a computer safe, and I get a pair of shoes, and things are even.

I think you were doing better with the gas, Mt dew and cigarette money.

[taxea]

yep...you report the fmv of the item you receive and deduct the expenses and the other person does likewise.

[joanmcq]

At what point do you have to issue a 1099-B for barter income?

I just did 3 years back returns for my hairdresser, and I'll get paid in trade. It wasn't an insignificant sum; I'll be getting cuts & color for likely the rest of the year.

[Gary2]

yep...you report the fmv of the item you receive and deduct the expenses and the other person does likewise.

The other person may or may not have to do likewise. He didn't perform any services. So unless he's in the business of making or selling the shoes, or the shoes are otherwise related to his income, or the value of the service is more than the basis in the shoes, he has no reporting requirements. Without a business connection to the shoes, all that happened is that he bought some computer service and paid for the service with shoes instead of cash. If the service was worth more than his basis, he has a gain, if not, he has a non-deductible, non-reportable loss on personal use property.

[taxea]

Gary I agree with that. I was summerizing what the rules say,

Re the hairdresser issue if the service you provided was a part of your business you give the hairdresser an invoice that you would normally charge for your services and a 1099 at the end of the year. You claim the amount as income in the year you did the work. Then be sure that you deduct each appt, at the amount she normally charges for the service, from the amount to keep track of what she still owes you. However you cannot take the expense on your business return because of the nature of the payback.

[Gretel]

I recently took a closer look at filing requirements for form 1099-B since I thought I might need to do that.

My conclusions are that only if the trade is part of an official trade place, meaning you give your commodity to them and get another commodity in return, then that place has to issue Form 1099-B.

I could be far off but that is the best I could do.

[tpert]

Could someone comment on this situation....

I have occasionally spoken at local meetings where I talk about taxes and answer questions. Most of these are at libraries or local meeting halls and I charge no fee for these engagements. At one such event last year, it was at a paid event where a small amount is charged for the buffet meal that is served (it is a kind of fund raising activity) and I was the guest speaker. They did not charge me for the meal since I was the speaker. Are we saying that I should be reporting the FMV of the meal as earnings? Since the cost that members paid included the value of the guest speaker (me) should I discount the cost of the meal I received since I did not benefit from hearing me speak?

Thanks.

[JohnH]

Depends on how the meal tasted.
It may have had no value to you at all.

When I listen to recordings of what I've said, it often results in heartburn.
(Don't know what the effect may have been on the other listeners)

[powerage]

I'm not going to worry about it. When I fix a friend's computer, I don't put a value on my services. I'm happy to help them out and to have another computer safely connected to the internet. I did look up the value of the shoes, and it is $50.

On a side note, I now own 3 pairs of shoes. My steel toes and my dress shoes are the others. I'm moving up in the world.

[joanmcq]

I was curious with my hairdresser because for me, I'm providing biz services but receiving personal services in exchange. He is providing biz services and recieving partial biz & partial personal (tax prep w/sch C).

But neither of us has a lot of cash and we both have services the other wants.

[S T]

Bartering Info

From TTB page 15-7

Bartering. The FMV of products and services received through
bartering can be considered business income if the products or
services rendered are associated with the sole proprietorship. If
the sole proprietor trades through a barter exchange program,
the program will issue Form 1099-B, Proceeds from Broker and Barter

irs link on "barter" http://www.irs.gov/businesses/small/...188095,00.html

Informational purposes only

Sandy

[joanmcq]

Thanks, I was spooked by the thought of answering the check boxes next year...and the instructions to the form, of course, were useless.

And whatever search terms I put into the IRS website also seem to be useless.

[taxea]

Could someone comment on this situation....

I have occasionally spoken at local meetings where I talk about taxes and answer questions. Most of these are at libraries or local meeting halls and I charge no fee for these engagements. At one such event last year, it was at a paid event where a small amount is charged for the buffet meal that is served (it is a kind of fund raising activity) and I was the guest speaker. They did not charge me for the meal since I was the speaker. Are we saying that I should be reporting the FMV of the meal as earnings? Since the cost that members paid included the value of the guest speaker (me) should I discount the cost of the meal I received since I did not benefit from hearing me speak?

Thanks.

This is not a barter this is a marketing expense, if you have any expenses related to your speaking engagements.