For instance, for farmers exchanging cotton for eggs or corn, when no cash is used in the transaction? Is there an analog to a sales tax?
2007-08-05 04:29:04 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
This is considered "barter" income and it is taxable.
In your example, the farmer exchanging cotton for eggs, would include in income the fair market value of the cotton he traded for the eggs. The egg farmer would include in his income the fair market value of the eggs.
2007-08-05 04:35:31 · answer #1 · answered by Mark S 5 · 1⤊ 1⤋
"Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. If you exchange services with another person and you both have agreed ahead of time as to the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise."
2007-08-08 20:38:26 · answer #2 · answered by Jss 7 · 0⤊ 0⤋
I don't think so. I can't imagine exchange like that happens very often anymore.
2007-08-05 04:35:10 · answer #3 · answered by Anonymous · 0⤊ 2⤋