Bartering
In case you missed it, just know that the fair market value of property or services received through barter is taxable income, courtesy of the IRS. Therefore, when you exchange goods or services in lieu of cash with another business owner, both parties must pay taxes and include the value of such goods or services as income on Form 1040.
Keep in mind that an informal exchange on a noncommercial basis, such as carpooling, is exempt from taxes. However, if you’ve made a barter exchange, you’ll most likely receive a Form 1099-B in the mail, documenting the value of cash, goods, services, credits you received from bartering.
