Deleted
Joined: Nov 26, 2024 12:57:43 GMT -5
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Barter
Jan 16, 2014 12:36:39 GMT -5
Post by Deleted on Jan 16, 2014 12:36:39 GMT -5
Ok. Sort of along the vein of FB's babysitter and questions you don't want to know the answer to...
If one claims income through barter, do they need the other party's information? Is it causing an issue if the other party does not intend to claim it?
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taxref
Junior Member
Joined: Dec 31, 2010 11:09:13 GMT -5
Posts: 220
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Barter
Jan 16, 2014 13:14:02 GMT -5
Post by taxref on Jan 16, 2014 13:14:02 GMT -5
Barter transactions are to be reported on Form 1099-B, so you would need the other party's tax information. You can be fined by the IRS for not completing the form, or completing it incorrectly.
If you submit a 1099-B with an incorrect TIN, after a few notices you will get a backup withholding letter. For non-cash transactions, where you would be unable to withhold 30%, that would cause a major problem. If the other party didn't give you cash for the 30%, you would need to pay it yourself. Clearly, that is not a good situation.
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Deleted
Joined: Nov 26, 2024 12:57:43 GMT -5
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Barter
Jan 16, 2014 13:24:57 GMT -5
Post by Deleted on Jan 16, 2014 13:24:57 GMT -5
Barter transactions are to be reported on Form 1099-B, so you would need the other party's tax information. You can be fined by the IRS for not completing the form, or completing it incorrectly. If you submit a 1099-B with an incorrect TIN, after a few notices you will get a backup withholding letter. For non-cash transactions, where you would be unable to withhold 30%, that would cause a major problem. If the other party didn't give you cash for the 30%, you would need to pay it yourself. Clearly, that is not a good situation. If you bartered personally, you would not issue a 1099, correct? |
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taxref
Junior Member
Joined: Dec 31, 2010 11:09:13 GMT -5
Posts: 220
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Barter
Jan 16, 2014 19:02:46 GMT -5
Post by taxref on Jan 16, 2014 19:02:46 GMT -5
You are correct that personal transactions are not subject to the reporting requirements. Consequently, if you and your neighbor are both lawyers, and you trade your lawnmower for his dishwasher, there is no reporting required.
If however, you are a mechanic and he is a painter, and you fix his car in return for painting your living room, 1099-Bs would be needed.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Barter
Jan 16, 2014 20:58:01 GMT -5
Post by mwcpa on Jan 16, 2014 20:58:01 GMT -5
As ref noted, if you exchange service for service more than likely you are conducting business and the "income" side may be income, but the amount exchanged for may not be a deduction.
As he noted, I am a CPA, I do someone's tax return in exchange to fix my car. The value of both is 1,000.00. I have income of 1,000.00 and no tax deduction for fixing my car. The mechanic on the other hand has income of $1,000.00 and maybe some of the tax work is business related and he may get a deduction against his self employment income for that. |
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