Are Trade Exchanges Legal?
Absolutely! Bartering through a trade exchange is perfectly legitimate,
and a reputable exchange will not allow illegal transactions.
We comply fully with IRS rules regarding tax reporting. It is no
longer true that youll be audited because of bartering.
HOW DOES TRADING AFFECT MY TAXES?
Trading is a taxable event. According to the Federal government,
buying and selling through the network is no different than completing
cash transactions. The network will issue you a 1099B at the end
of each calendar year reflecting your sales. Of course, all of your
purchases, and fees paid to the network, are tax deductible expenses.
Sales tax is not traded. As the seller in
a trade transaction, Your State Government expects you to remit
sales tax. Therefore, the sales tax will be paid to you directly
by the buyer, in cash. County government will expect to be paid
for licenses and permits. When buying from a member who is a licensed
contractor, please expect to pay for all necessary licenses and
permits in cash. The contractor will "pull" the permit,
and hand your check to the County government. Always feel free to
ask for guidance on any of these issues.
What does a non-profit organization have
to do with barter?
By donating your usable excess inventory or other non-cash contributions
(such as barter credits, boats, real estate, books, furniture, etc),
the donated items can be exchanged by the member foundations for
other items needed by their organization and others like them to
obtain the things needed to reach the goals of their particular
When you donate these items you will receive a tax deduction and
receipt for the full fair market value at the date of gift. In order
for all gifts of personal property with a value over $500 to be
deductible by the donor, the item must have:
- An independent appraisal: and
- The completion of IRS Form 8283 (Non-Cash Charitable Contribution)
to accompany your federal income tax return.
When donating to a Foundation under the National Heritage Foundation,
prior approval from NHF is necessary before any gift is received
by the foundation.
BoA Merchants Code of Ethics
At Barter of America.com, Inc., we have established policies of
trading to ensure that all parties involved are protected in a transaction
and the trading process is fair to everyone. These policies are
the backbone of our network and give strength to our exchange. By
adhering to these policies we are able to make the system work for
you. If you encounter a business which is not trading properly -
DO NOT TRADE WITH THEM. Please notify us immediately so we may review
our trading policies with them.
Our three main policies of trading are explained
in detail below:
- First Line Products - Basically, every item or service
offered for cash is also offered for trade. We believe in our
promise to generate you new business and the perception created
when restrictions are placed on certain items within an exchange
is that it is not as good as cash because it's on trade. We avoid
this negative appearance to trade by requiring the sale of all
first line products within our exchange.
- Prevailing Prices - This is defined as the most commonly
offered price, whether it be cash or trade. This includes sales
prices prior to any additional negotiations. This means that if
a retail store is having a sale, then the sale prices should be
honored on trade. Also remember, in the cash world, one business
may charge more than another business; this holds true for the
trade world as well.
- 100% Trade - At BoA we manage a 100% trade economy requiring
sales to be done on a full trade basis. We do not allow part cash,
part trade transactions. In order to have consistency within the
exchange and to treat all clients fairly, it is important that
the principle of 100% trade be upheld.
To more easily facilitate transactions, BoA utilizes a plastic
membership/ID card. In addition, BoA provides all members with a
monthly account statement, membership updates and a yearly 1099
tax form, since trade income must be reported to the IRS like regular