Taxes

There is no tax advantage or disadvantage to barter transactions. They are treated just like cash when it comes to taxes.

In 1982, the United States Congress passed TEFRA, the Tax Equity Fiscal Responsibility Act. TEFRA recognizes trade exchanges, like Southern Barter Exchange, as third party record keepers of barter transactions and stipulates that all trade revenue earned is treated as income. It also allows that certain purchases made through the exchange are tax deductible. Thus, trade income and deductions are treated the same as cash, allowing for the same accounting as you already do.

Barter exchanges are required to file Form 1099-B for all member sales within the calendar year.

Examples of bartering and information on how to report the income are described in IRS Publication 525, Taxable and Nontaxable Income.

Sales Taxes

Sales tax, where applicable, is paid in cash to the seller.