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Barter Exchange

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Definition:

A barter exchange is an organization which serves as a third party to coordinate barter transactions between members of the organization and as a bank to keep track of the value of barter transactions and the value of each member's account. Barter exchanges provide monthly accounting for each member and year-end tax reporting of barter transactions.

Barter exchanges are usually local or regional, and they have websites which list products or services for sale. If you buy products or services from exchange members, your Trade Account is debited; if you sell products or services to other members, your account is credited.

At the end of each year, the barter service provides a record of the fair market value of all income you received from transactions, on a Form 1099-B.

Barter exchanges charge an initial membership fee, a transaction percentage, and a monthly maintenance fee. Some barter exchanges also charge a monthly fee to "stock" the account, to encourage buying and selling.

Learn more about barter exchanges from the International Reciprocal Trade Association (IRTA), which also lists member exchanges.

Back to Barter and Taxes Information

Examples:
For example, you join a barter exchange and find services you want to buy. The fair market value of these services is recorded. If someone buys from you, this value is also recorded.

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