Modern Trade and Taxes FAQs

Are there any tax advantages or disadvantages to modern
trade in a barter exchange?

Trade credits should be viewed as you do your cash income. There
are no inherent tax advantages or disadvantages just because you
utilize modern trade. Utilizing a trade exchange is a marketing
tool, not a tax tool. Generally speaking, as with cash income,
purchases made with your trade credit that are business-related are
deductible, and conversely, purchases made for personal use are
not deductible.

What constitutes income in a trade exchange transaction?

Any time trade credits are posted to your account within the exchange,
property or services are received, cash is received or scrip is issued
to you as part of a trade transaction.

In what year are trade credits taxable?

Currently, the United States is the only country with defined
reporting requirements for trade exchanges. Therefore, members
of any U.S. trade exchange will receive a form 1099B from the
exchange based on the calendar year. The 1099B will show the
amount of trade credit posted to your account for that year. These
amounts should be included in your annual tax filing.