I tried emailing this to Brandon of alt-market but they appear to have a misconfigured DNS system so mail is having issues.
They have no mention of taxes due on bartering. While many people do not think that bartering requires taxes the IRS disagrees. I personally think this is silly because there is no profit generated, no capital gains, nothing. If I go to the store and pick up something for a friend who repays me the exact cost of the item there is no tax assessed but when you barter it seems there is. I probably should not say that too loudly or they will start taxing doing favors for friends.
I personally think this is an important issue because they are pushing the barter aspect quite a bit and with tight budgets the tax collectors tend to come out like cockroaches in a cheap motel. They are in essence running a higher risk of audits which will ultimately be based on estimated value of goods.
http://www.irs.gov/taxtopics/tc420.htmlBartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of goods and services received in exchange for goods or services you provide must be included in income in the year received.
Further
http://www.irs.gov/businesses/small/article/0,,id=187904,00.html words it slightly differently
Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.
Given this it looks like the IRS thinks the entire value of what you receive must be declared as income. A person who does 1 daily barter for $300 would generate $109,500 in taxable income at the end of the year, as they only have the $300 item to show for their troubles they can not pay that tax bill. There is something fundamentally wrong with this approach.
I bet they would frown upon Alice selling a $300 item for $0.01 (a loss so usually not taxable) to Bob and Bob selling a $300 item to Alice for $0.01. It involved an exchange of money thus not the IRS definition of bartering but they would probably claim that it is in essence bartering and still go after people if they thought they could justify their existence by doing so.
