A taxpayer is permitted under the law to give any other taxpayer up to $12,000 during a tax year, with no tax consequences of any kind to the donor or to the recipient.

But if a trade exchange member gives barter credits (trade dollars) to another member (as a gift), the amount of the donation is posted in the account of the recipient. And there is no way for the barter company to recognize the tax nature of the deposited funds, any more than your bank can identify which of your cash deposits are taxable.

In this example the barter deposit could be improperly taxed. You may want to file this information and show it to your tax advisor to determine your barter income.

The BarterNews FastStart Program reports on five kinds of deposits which could be improperly taxed. This Program be in your barter library if you wish to optimize your efforts:
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This entry was posted on Monday, May 19th, 2008 at 6:24 am and is filed under From the Desk of Bob Meyer. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.