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With no cash income, I am musing more strongly lately on the idea of trading goods and services for other goods and services directly, with no actual dollars involved.
If I have A and want B, while you want A and have C, we need to find a third party. Is that really sufficiently daunting that few trades are done? Or do people have enough varied wants that a bargain can usually be struck?
When does the government get a cut? If I trade my red pencil for your blue one, the IRS probably doesn't give a hoot, even if we're both happier that the deal was made. But if I'm trading a month's labor for, oh, I don't know, a motorcycle, they might care. Where's the line?
What do I have that I'm willing to trade AND that is in demand? I am great at plunging into big hairy organization-and-cleanup tasks, like sorting old photos, and breaking the problem down into manageable chunks. It takes time, but it gets done and done well. What else? I will catch a spelling error in just about anything, but computers can do that too. What else? Must ponder.
If I have A and want B, while you want A and have C, we need to find a third party. Is that really sufficiently daunting that few trades are done? Or do people have enough varied wants that a bargain can usually be struck?
When does the government get a cut? If I trade my red pencil for your blue one, the IRS probably doesn't give a hoot, even if we're both happier that the deal was made. But if I'm trading a month's labor for, oh, I don't know, a motorcycle, they might care. Where's the line?
What do I have that I'm willing to trade AND that is in demand? I am great at plunging into big hairy organization-and-cleanup tasks, like sorting old photos, and breaking the problem down into manageable chunks. It takes time, but it gets done and done well. What else? I will catch a spelling error in just about anything, but computers can do that too. What else? Must ponder.
no subject
And the short answer to when does the government get a cut is ALWAYS. As you say, we all get away with trading the red pencil for the blue one, but pretty much, if the government knows about it, they get a cut. If you essentially start an organizing business, but don't give them a cut, and they eventually find out, they will extract that cut and then some. But the key is whether or not they are finding out about it.
And according to the BREAD website:
"Use schedule C or Schedule C-EZ of Form 1040 to report Barter Income. You can use a generic
invoice to keep track of your trades. Examples of bartering and information on how to report the income are described in IRS Publication 525 Table and Nontaxable Income."