Originally Posted by
Denny Crane
Your example sounds like the classic definition of “barter.” One is exchanging goods for services so both parties would have to file taxes based on the inputted income each side of the deal.......correct?
Denny
Well.....you've gone straight to a nuance of barter. 😁
Look at it this way. The farmer got his barn painted and, instead of paying cash to the painter, he paid with meat which the painter agreed was equal to the value of his services. Would you pay income tax on someone painting your house? I'm thinking no
but you would pay income tax on money paid to you for performing a service. Now, if the farmer tilled the painter's back lot in exchange for the painter painting the farmer's barn, the mutual income issue becomes a player.