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February 2015 Archives

Bartering - the Oldest Form of Trade is Still With Us, Part III

Since it is difficult to get an exact match where two businesses need equal amounts of each other's products or services, the opportunities for direct barter transactions are limited. That's where a barter exchange network comes in. The network deals in units of currency called trade dollars. The goods and services of one company in the network are exchanged for trade dollars that can be used to purchase the goods and services of any other company in the network. The network functions as a record keeper, sending each client a monthly statement and charging a fee usually 5% to 7% for each side of a transaction.

Bartering - the Oldest Form of Trade is Still With Us, Part II

If a business makes payments of bartered services to another business (except a corporation) of $600 or more in the course of the year, these payments are reported on Form 1099-MISC. For example, an attorney represents a painter for nonpayment of business debts in exchange for painting the attorney's law offices. The amount reportable by each on Form 1099-MISC is the fair market value of his or her own services performed. However, if the attorney represents the painter in a divorce proceeding, then there are two types of expenses involved in this transaction, painting the office is a business expense for the attorney but the divorce expenses are personal expenses for the painter.

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Spencer Law Firm LLC
320 Race Ave
Lancaster, PA 17603

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