Posted on December 14th, 2009
Original posted by: Alexander Fowler
http://www.thebizownerblog.com/index.php/2009/12/14/barter-resources/

Here are some useful resources for those looking to get started with barter.

1. Barter Agreement

When we barter through Geektime, we ALWAYS use a barter agreement. You can download the sample barter agreement (in PDF form) that we use from this site. It’s a simple one page template we found on the Internet, but it spells out who is bartering, what is being bartered and creates an official record of your trade.

2. Barter Sites

There are a number of free barter sites on the Internet, in addition to professionally managed barter clubs or barter circles. Keep in mind that the professionally managed clubs charge a fee, but handle all of the administrative paperwork AND open up a larger network of potential partners. Here’s a list of some of the freebies, (try searching for your barter clubs or barter circles in your city or region for a list of the barter networks):

• Craig’s List – the online classified giant has a free barter section for each region in which it operates.
• BarterQuest – a well designed interface designed to match up partners based on “wants” and “haves”. Easy to use and search.
• U-Exchange – a no frills bulletin board system with filtering and search capabilities.
• FavorPals - very similar to U-Exchange, with time and date stamps to indicate freshness.

3. Tax Information

Don’t forget the IRS. They want to be paid on any and all compensation you receive, including bartered goods and services. Topic 420 on the IRS website covers bartering income from their perspective.

If you have any information you’d like to add, please comment. Happy Bartering!

Posted on November 28th, 2009
http://www.trcb.com/employment/getting-the-job/bartering-instead-of-going-bust-9006.htm

Bartering is a system of trade that predates the use of money, whereby you trade your skills, services, or products for something you want from someone else.

About 25 years ago, during a recession in the early 1980s, a lot of bartering clubs sprang up, so people who were out-of-work or having financial problems could increase the funds available to them. Once people joined the group, they could turn their skills, services or products into points; then others could employ them or purchase their products using the points they had accumulated in their own accounts. And if no one wanted to use one’s skills, services, or products, they would accumulate negative points up to a cap, until they found a way for others to want what they offered. Through this system, these clubs sought to achieve a fair balance between what people were getting and giving.

As an organizer, think of running a barter service as a new business, which can be very successful if you have the skills needed to run the business, such as a good head for figures, an attention to detail for everyday operations, and good communication, marketing, and sales skills to promote the service. If you simply want to participate in bartering, you might do this directly by offering an exchange with your own contacts or try posting whatever you are offering on one of the social media sites like LinkedIn.

To determine what to list, think about what you have done in the past and list what you can offer that might be of interest to someone else. If you have a lot to offer, divide up your skills, services, or products by category and post them separately.

We recognized that a lot of people are very concerned about bartering and taxes. They even consider barter as illegal. But it isn’t. There are some parts of bartering, especially in cases of trading with services, where small businesses have to mention their exchanges in their tax computation. we are actually no expert in terms of taxes either. who actually is? But we did find some helpful information of the IRS, where you can print out a form to make sure you follow the rules of Uncle Sam.

Another great source of information is this video by CNN, where they describe bartering and different tax implications.

original post by Sandra A. Parks

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a modern barter exchange company.

Bartering is the most ancient form of commerce. While our ancestors may have exchanged eggs for corn, today you can barter computer services for auto repair.

Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.

Here are a few things you should know about bartering:

• Barter Exchange A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves. Whether this activity operates out of a physical office or is internet based, a barter exchange is generally required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the IRS.

• Barter Income Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter – barter for another’s products or services – you will have to report the fair market value of the products or services you received on your tax return.

• Taxes Income from bartering is taxable in the year it is performed. You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss.

• Reporting The rules for reporting barter transactions may vary depending on which form of bartering takes place. Generally, you report this type of business income on Form 1040, Schedule C Profit or Loss from Business, or other business returns such as Form 1065 for Partnerships, Form 1120 for Corporations, or Form 1120-S for Small Business Corporations.

For more information please see http://saptaxes.net or call 972.569.7938

International Revenue Service, US Department of the Treasuries:

Barter and Taxes

As with any discussion about taxes, it is always prudent to start by stating what you don’t know. I am not a tax expert and have no special expertise in the taxation of barter transactions. So please do not read this blog and accept it as advice. Rather, on a subject where there appears to be significant confusion, I am attempting to communicate my general understanding of the tax implications of bartering and seeking to initiate a dialogue.

First, it can be unequivocally stated that under the U.S. tax law there are tax implications when you trade. There may be reporting requirements and a completed trade can give rise to tax liabilities. This being said, the tax liabilities attendant to bartering will vary and can be less onerous than for a “buy and sell” transaction depending on a number of factors, including where you are resident and the types of items that are traded (goods, services, or real estate). In short, there may be real tax advantages to bartering.

Reporting requirements can apply both to the trading partners and to the trading platform (BarterQuest) that facilitates an electronic trade. While there are existing regulations, my common sense leads me to believe that the “rules of engagement” will be further refined as electronic barter matures. An analogy is eBay, where a ruling was issued only recently by the U.S. tax authorities that clarified which auction transactions require reporting by eBay. My interpretation is that, in essence, reporting by eBay was limited by the ruling to more material transactions or to recurrent transactions that suggest that a seller is engaged in a business.

While tax liabilities are the theoretical consequence of bartering, in a model where there is always, by definition, a fair exchange and no money actually changes hands, there are practical difficulties related to the determination of cost basis and market value. Has anyone made a profit? Again, I believe that the “rules of engagement” will evolve.

We at BarterQuest would like to take this opportunity to call upon our industry and other interested groups to work together toward a greater rationalization of the tax laws for barter transactions. This effort has special importance with respect to the application of such laws to routine transactions between individual consumers. These barter transactions not only may be critical to people who are looking for ways to save money or do not have the money to otherwise get what they need, but, in the aggregate, constitute a “green” machine that can have a material impact on the preservation of our environment.