Barter income

[Arthur Rubin]

The Wikipedia article Local Exchange Trading Systems makes some interesting comment on taxation, with the talk page indicating that in Australia, this barter "income" is not taxable if neither party is a professional. Does anyone know if this is accurate? It's certainly not true in the US.

[Harvester]

No, that's not how it works in the US. Income is income whether its caller 'barter' or you're paid in silver medallions or seashells.

The real question is . . what's qualifies as INCOME, and hence taxable, for federal income tax purposes? A careful reading of the 5-inch thick US Tax Code reveals, underneath all the deception, is that it involves gain from privileged activity or federal property. Gain from activity of common right, a paycheck, is not taxable. Unless of course, the worker is in contract with the US government (ie, United States of America, Incorporated, a federal corporation), and equity contract law applies before any Constitutional issues are addressed.

And yes, we patriots prefer payment in silver/gold, or:
http://www.opencurrency.com
http://www.mainstreetcash.org
http://www.goldmoney.com
or anything really but soon-to-be-worthless Feudal Reserve Notes!

And now, by exclusive engagement, it's time forrrrrr, the shill tag team - Famsheeple and LPC !!

[bmielke]

No, that's not how it works in the US. Income is income whether its caller 'barter' or you're paid in silver medallions or seashells.

The real question is . . what's qualifies as INCOME, and hence taxable, for federal income tax purposes? A careful reading of the 5-inch thick US Tax Code reveals, underneath all the deception, is that it involves gain from privileged activity or federal property. Gain from activity of common right, a paycheck, is not taxable. Unless of course, the worker is in contract with the US government (ie, United States of America, Incorporated, a federal corporation), and equity contract law applies before any Constitutional issues are addressed.

Now, it's time for the tag team - Famsheeple and LDC !!

dipsh*t, the question Mr. Rubin asked was if anyone knew if what the article said was true of Australian law, not what you think of American Law.

ETA:

Does anyone know if this is accurate? .[/It's certainly not true in the US

[bmielke]

The question I have is, has the IRS ever gone after a non-professional for bartering. I am a decent framing carpenter, if I build my neighbor a shed and in exchange he mows my grass for the year is the IRS going to come after me? I doubt it, I am not in the business of framing buildings, how would they know what I did on my free time, now I agree if I had a framing business and claimed the time I spent building the shed as a loss then the IRS might come after me.

By the same token if I grow tomatoes in my back yard and trade 10 pounds of tomatoes to my neighbor for a bale of hay how will the IRS know? Niether of us is in the business of farming.

[Harvester]

By the same token if I grow tomatoes in my back yard and trade 10 pounds of tomatoes to my neighbor for a bale of hay how will the IRS know?

Well generally, they would not know. And that's why the IRS hates barter. They would prefer the seller to voluntarily declare on Form 1099-MISC (Consent, the primary victory!) any payments/barter over $600. annually (dang, it's that pesky Revenue Act of 1862 again!) to any un-incorporated individual. Of course there's statutory language* to exclude most of us but they don't want you to know that. The IRS has nothing without an INFO RETURN.

I suppose they could compare your bank records with reported income but, that's not done automatically. Don't ask why banking & taxation are intertwined (no need to learn truth now).

[Dr. Caligari]

Of course there's statutory language* to exclude most of us but they don't want you to know that.

Then I'm sure you could quote that statutory language for us.

[notorial dissent]

My question would be, would there be income generated if the barter were for say $12 worth of tomatoes, in this market about 3#, for an equivalent amount of hay, say 3 bales

[Harvester]

Then I'm sure you could quote that statutory language for us.

Certainly. I would first direct you to instructions for Form 1099-MISC:
http://www.irs.gov/instructions/i1099msc/ar02.html

Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. ..

(italics added) I would then direct you to Title 26 Sec 7701 http://www4.law.cornell.edu/uscode/26/7701.html

Sec. 7701 - Definitions
(a) When used in this title....
(26) Trade or business
The term "trade or business" includes the performance of the functions of a public office.

Well now, if it isn't our old friend the statutory custom definition. The term "trade or business" has now lost its common meaning for the purposes of taxation; it must involve the performance of the functions of a public office, since nothing else is defined or included in this definition.

In most instances in bartering, the exchange of goods and/or services for other goods and/or service, neither party is going to take the time and effort to fill out a 1099 form. The IRS loves a paper trail and without one in a barter situation, it makes it nigh impossible to determine if a taxable event has occurred..

Agreed. Wait .. I agree with CapnKickback?!

[notorial dissent]

Proving yet again Harvey, that you are a clown. You are regurgitating the same tripe that put prattlin' Petey in the slammer, Includes means includes, NOT excludes everything but.

Then why should I be surprised, you have been totally wrong about everything else you have gone on about, and this is no exception.

[Arthur Rubin]

My question would be, would there be income generated if the barter were for say $12 worth of tomatoes, in this market about 3#, for an equivalent amount of hay, say 3 bales

Capital gain on personal property, or farm income? In any case, it would be more interesting to ask whether GST would apply. One of the ATO (Australian Taxation Office) "interpretative decisions" suggests that GST fraud can be performed using credits created by a barter exchange. However LETS doesn't appear to be exactly a barter exchange, either.

[Arthur Rubin]

The question I have is, has the IRS ever gone after a non-professional for bartering. I am a decent framing carpenter, if I build my neighbor a shed and in exchange he mows my grass for the year is the IRS going to come after me? I doubt it, I am not in the business of framing buildings, how would they know what I did on my free time, now I agree if I had a framing business and claimed the time I spent building the shed as a loss then the IRS might come after me.

By the same token if I grow tomatoes in my back yard and trade 10 pounds of tomatoes to my neighbor for a bale of hay how will the IRS know? Neither of us is in the business of farming.

(after a brief spelling correction) My recollection was that a barter club (in the US) is supposed to report to you and to the IRS if you "earn" over $600 worth of credits. However, my recollection was wrong. A "barter exchange" (which does not include "arrangements that provide solely for the informal exchange of similar services on a noncommercial basis) must report each transaction over $1 (to an individual member) on form 1099-B, unless the exchange only has 100 transactions. (Source: form 1099-B instructions.) The 1099-MISC reporting requirements for an individual barter transaction involving (noncommercial) services, or 1099-B (or sales tax) requirements involving goods, probably do not rise to the level of reporting requirements, although there is still technically income.

[Ragnar]

or anything really but soon-to-be-worthless Feudal Reserve Notes!

I'll take all your worthless FRNs. But you'll find a reason to keep them, won't you?

[Cathulhu]

Harvester, you maroon, the fact that 1099-Misc is filed for a trade or business does NOT mean that income not in the trade or business is a freebie. Your logic is on the level of "2 plus 2 equals rutabaga"; as usual you take things out of context. And deliberately misspell Famspear because you aren't all that witty. Or that good at spelling.

In a battle of wits, sadly, you're not even half armed.

[silversopp]

Harvester...here is a test of your command of the English language

You're at the store and see a box with a picture of a radio on it. The label on the box states plainly "Includes two AA batteries" You purchase this product. When you get home and open the box...what do you expect to see:

A) A radio with no batteries
B) A radio with batteries
C) Two AA batteries and nothing else

[bmielke]

Harvester...here is a test of your command of the English language

You're at the store and see a box with a picture of a radio on it. The label on the box states plainly "Includes two AA batteries" You purchase this product. When you get home and open the box...what do you expect to see:

A) A radio with no batteries
B) A radio with batteries
C) Two AA batteries and nothing else

Is this one only for Harvey or can everyone play along?

[Cathulhu]

Silversopp, let me save you the trouble. You gave him a choice of A, B, or C, so obviously Harv's answer must be either "I don't pay taxes!" or "kumquat", both equally logical.

[Brandybuck]

The question I have is, has the IRS ever gone after a non-professional for bartering.

I don't personally know of any instances, but I have heard of it from "friends of friends". A business was on the ropes, couldn't make payroll, and so paid a few employees with inventory.

[bmielke]

The question I have is, has the IRS ever gone after a non-professional for bartering.

I don't personally know of any instances, but I have heard of it from "friends of friends". A business was on the ropes, couldn't make payroll, and so paid a few employees with inventory.

Yes I can see that, there would be a paper trail of some kind, and I would imagine that if a company was bad off they might be targeted with an inventory aduit. (If such a thing is possible.)

[Harvester]

Yes, it's true. Form 1099-MISC, and most other 1098,1099 forms, are only to be used in regard to the performance of the functions of a public office. The fact that others misuse the form (the IRS certainly doesn't mind!) doesn't make them right. This is what the law says. There's no other definition given. It's a limiting list; but may be considered expansive in that the definition also encompasses other things within the same class as the term defined. Therefore "trade or business" also encompasses activities/things in the same class as "performance of the functions of a public office." Are you all ignorant of the rules of statutory construction/deception? Certainly not all of you have been led astray by the Famshepard .. have you? There's no need for a custom definition unless, unless you needed to limit the tax to it's constitutional bounds, and, in the process, not give away the secret. THAT THE INCOME TAX IS AN EXCISE ON PRIVILEGED ACTIVITY/STUFF.

If I bought a package with a radio picture that stated "includes two AA batteries," I would expect it to contain batteries. You didn't indicate the package size or weight, but if it were the size and weight of a radio with batteries, yet contained only batteries, I might have a case against the seller/manufacturer for false/misleading representation and possible fraud. Of course, that case might not get far if the seller/manufacturer were banksters generating trillions off their deception, paying frontmen and judges to keep the scam going. "Don't sue the banksters dude, they'll send you to prison! Be thankful they only soaked you $29 for batteries and be on your way - bankers havta eat too!"

http://www.zerohedge.com/article/liberation-essays-no-1

100% of all income taxes levied upon US citizens are either

(1) shuttled directly into the private coffers of the private owners of the US Federal Reserve central bank, as this is the portion of income taxes appropriated toward “interest on the Federal debt”; or

(2) absorbed by government subsidies (bailouts for bankers), corporate welfare, etc, that produce zero output beneficial to society.

There is no difference between the immoral act of US federal income tax and an annual home invasion by an armed criminal that steals an amount equivalent to the income taxes levied upon American citizens. ..

[The Operative]

To those who might be new to Quatloos, everything that Harvester posts is almost guaranteed to be wrong, a conspiracy theory or both.