Robert W. Wood writing for Forbes.com says that the IRS wants to tax your bartering transactions:
The IRS starts with a down-home definition. Bartering is trading one product or service for another, whether informally and one-on-one or with multiple parties in a commercial setting.
[Barter] has a storied, even ancient tradition. “Our ancestors may have exchanged eggs for corn,” explains the IRS, but “today you can barter computer services for auto repair.” The IRS also lists plumbing services for dental work. You name the swap, the IRS wants to tax it.
Wherever it arises, it is income to both sides, just like cash, according to the IRS. That means each side must report the fair market value of the item or services received on their tax returns. It isn’t clear how much bartering goes on, or how much self-reporting there is. My guess is there is quite a lot of the former and not much of the latter.
The IRS website includes a Bartering Tax Center which describes in detail the taxation and reporting of barter transactions.
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