If you receive a payment in kind? What do you deduct from your end? The labor?

Question

Say if you provide a service to a company and in return they give you free hotel stays. They deduct the fair market value of the hotel room. Do you deduct the fair market value of the service you provided?

What if what you receive is worth more on the market then what you have given?
Here's the catch. Say you did this work for a hotel and in return they give you a certain amount of free nights. and where you did the work the nights are only worth $50.00. But you can use the free nights at another hotel in a different area where the nights are $150.00. would that make a difference in claiming income?

Answer 1

No, you don't deduct your labor - that's what you're getting paid for, and what you are paying tax on. Say that in your example you received five nights hotel stays, worth $100 each. You got paid $500, so that's what your reportable income is. If you had out-of pocket expenses like supplies for the work you did, you could deduct that.

Basically you pay taxes the same as if you'd been paid cash rather than services or merchandise, and the company takes a deduction for paying you the same as if they had paid you cash or merchandise.

Answer 2

If you are providing a service, you deduct your costs of providing the service, such as supplies, equipment, transporation. The company paying you deducts the costs of obtaining the service from you.

You received hotel stays. You add the fair market value of the hotel stays to your income. Use the lowest discounted figures you can find. It doesn't matter if you later redeem them for more.

Answer 3

I used to be fostered by way of my adoptive dad and mom beginning 1963 and finalized in 1964, and my adoptive sister used to be fostered beginning 1967 finalized in 1968, however there have been no subsidiaries or every other form of repayments. I can most effective talk approximately their reports in Pennsylvania although. I have no idea if it used to be one-of-a-kind in different states and even in different counties, however I've on no account heard of a BSE foster-to-adoptive dad or mum receiving any form of repayments. I'd be fascinated about listening to extra. ETA: Our adoptions had been individual, however I do recognise that our adoptive dad and mom needed to be authorized by way of the county as foster caretakers.... despite the fact that the approval approach used to be all bureaucracy and no homestudies nor visits had been ever performed.