When times are tight for businesses, bartering for goods and services may be better than paying cash. But, from a tax point-of-view, there are some issues to consider: 1) The fair market value of bartered goods is taxable income, just as if you’d received a cash payment; 2) exchanges of services result in taxable income for both parties; 3) income is realized when services are exchanged for property; and 4) if you participate in a barter club, you’ll be taxed on the value of “credit units” when they’re added to your account, even if you don’t redeem them for actual goods and services until a later year. There are other tax considerations about joining a bartering club. Call or visit our website for more information! www.mjscpa.com/
