Information about Bartering Income and Declaring Taxes

By | April 13, 2014

Barter and Exchange Transactions

Even if you do not receive money for something, there still may be taxes due if you have income. A common example of this is when a taxpayer engages in bartering.

Bartering occurs when you exchange goods or services with no money exchanged. An example of bartering is a electrician who provide their services in exchange for medical services provided by a doctor. You must include in gross income in the year in which the fair market value of the goods or services received in exchange received.

Information about Bartering Income and Declaring Taxes

Generally, this income is reported on Schedule C (Form 1040) or Schedule C-EZ (Form 1040), Profit or Loss from Business (Profit or Loss from Business). If you did not report this income, you can correct your return by filing Form 1040X.


IRS Form 1099-B

If you exchange goods or services through a barter organization, you should receive Form 1099-B , Proceeds from Broker and Barter Exchange Transactions (earnings brokerage transactions and barter). The IRS will also receive the same information. If you receive income from bartering, you may have to make estimated tax payments. See Form 1040-ES, Estimated Tax for Individuals (estimated Tax for Individuals), in English, for more information. If you have an occupation or a business, you may deduct certain costs incurred to perform the services you provide through barter.

See Publication 525 , Taxable and nontaxable Income (taxable and non-taxable income) for additional information on barter transactions. See our Tax Center page on Trucking for more information about the income of barter and barter organizations.


IRS Information on Form 1099-B

Truncation of Payee Identification Number on 2014 Payee Statements — 18-DEC-2014

Update to the 2014 Instructions for Form 1099-B, Box 2 — 19-DEC-2014

Reporting on a 2014 Form 1099-B the sale of a covered security that has accrued market discount — 20-NOV-2014

Information for filers of 2014 Form 1099-B for reporting the sale of a debt instrument that is a wash sale and has accrued market discount — 03-NOV-2014

Information for recipients of 2014 Form 1099-B whose sale of a debt instrument was a wash sale and had accrued market discount — 03-NOV-2014