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Mopsus
02-23-2008, 07:21 AM
While I know the barter system has been around for millennia, I have just recently heard about a website in Indy regarding individuals organizing to exchange services i.e.; plumbing work for computer repair, that sort of thing.

Since Indiana is the state where the Liberty Dollars were confiscated by the feds, I was curious. The notion of a non-monetary quid-pro-quo system intrigues me.

Has anyone had experience with this concept of an organized barter system?

FrankRep
02-23-2008, 07:33 AM
This is another reason why all the liberty activists need to move closer together (http://www.freestateproject.org/). We could organize a barter system and influence local politics.

utrunner07
02-23-2008, 09:19 AM
This is another reason why all the liberty activists need to move closer together (http://www.freestateproject.org/). We could organize a barter system and influence local politics.


yeah, yeah and then we could all walk around wearing "V" masks....yeah yeah thats sounds so cool...(rolls eyes)

IPSecure
02-23-2008, 09:23 AM
http://berkshares.org/

Libertytree
02-23-2008, 11:05 AM
The barter system has been around for thousands of years. Country folks and us poorer people use it all the time, whenever possible. Of course the gov hates it as it deprives them of another source of tax and consider it a part of the underground black economy.

It's fairly easy to set one up locally, either online or on actual bulletin boards in frequented places.

fedup100
02-23-2008, 11:09 AM
The IRS is all over every barter system and will kick your doors in if you don't report your barter as Income.

the (^%(^% (*^(&^ ) _(*&^^ *(&)*&)& holes!

rvkpa
02-23-2008, 11:31 AM
If you don't use their money how can they tax you? Lets say you create a token that you and your friends use to pay for goods and services, but it has no american dollar value. It would be like coupons at the grocery store. The currency doesn't "map" to the dollar. It's effectively worthless to anyone but the people in the system. How do they tax that?

wowabunga
02-23-2008, 11:35 AM
Craigslist is something like the 6th largest website on the planet... lots of barter and good deals to be had there.

fedup100
02-23-2008, 11:36 AM
If you don't use their money how can they tax you? Lets say you create a token that you and your friends use to pay for goods and services, but it has no american dollar value. It would be like coupons at the grocery store. The currency doesn't "map" to the dollar. It's effectively worthless to anyone but the people in the system. How do they tax that?

just go to any major barter site and read their statement on the IRS. The IRS has made thier on laws regarding barter and my friend, they call it income and you know what they say is gospel.

http://www.score.org/fc_8.html

Barter Tax and Accounting Issues
From the AllBusiness.com Finance & Accounting Center

Barter transactions can provide your company with important financial, sales and marketing benefits. Like other transactions, however, barter sales are taxable, and your company must report them to the IRS. This is also true of credits you receive or spend through a barter exchange; regardless of how you use barter credits, they are taxable as though they were cash.

Barter Income and the IRS
The U.S. government considers barter exchanges to be legal third-party record keepers, similar to banks, brokerages and other firms that deal with taxpayer records. Barter exchanges are required to complete and submit Form 1099-B, "Proceeds from Broker and Barter Exchange Transactions," for each of their members and the IRS. In order for the exchange to complete this form, you'll need to give the broker your taxpayer identification number.

As far as the IRS is concerned, barter dollars are identical to real dollars. As a result, you won't get any special tax benefits (or penalties, for that matter) from using a barter exchange. If you conduct any direct barter — that is, barter for another company's products or services — you'll have to declare the fair market value of the items you sold as taxable income.

This same-as-cash standard also applies to barter purchases: If a barter purchase is business-related, you can deduct it from your taxes, but if it's for personal use you can't deduct it.

Barter Accounting Tips
There are a few accounting guidelines to remember when you conduct barter transactions. First, keep in mind that all barter income is dealt with on the cash basis, and the IRS treats barter as income received whether you use accrual-basis or cash-basis accounting. Also, you must report and pay taxes on barter income for the year in which it accrues; if your business is profitable you should try not to have unspent barter credits at the end of the fiscal year. (If you're unprofitable, and your barter income does not make you profitable, the IRS won't tax it.)

What should you do if you have unspent barter credits at the end of the fiscal year? If your barter exchange allows it, you may be able to contribute them to charity and deduct them from your taxes.

Using Barter as Compensation
Barter can be a great way to provide bonuses or other types of compensation without raiding your company's bank account. Just keep in mind that barter compensation, like cash, is subject to personal taxes. If you use barter to compensate a contractor, include it on their Form 1099; if the recipient is a regular employee, declare it on their W-2 and withhold all appropriate taxes.

What Does the IRS Think about Barter?
Some business people believe that the IRS takes a dim view of barter transactions. As a result, they may assume that using barter subjects them to possible audits or to other legal scrutiny.

The truth is that a company using barter is no more likely to get audited than any other business. IRS rules concerning barter are now well established, and the government considers the barter industry to be a perfectly legitimate business.
Treat barter just as you would any other business activity. Keep good records, work with a reputable barter exchange and consult a qualified CPA if you have any questions or problems. If you handle barter transactions properly, they can be a useful — and profitable — part of your business.

Visit the AllBusiness.com finance and accounting center for tips on bookkeeping topics such as payroll, cash flow management and financial reporting. AllBusiness.com is a leading provider of practical information and services for growing businesses.
Copyright 2006 AllBusiness, Inc.

Viracocha
02-23-2008, 11:37 AM
About 15 years ago I used to be an account executive for a regional barter exchange. For a few hundred dollars per year you gained access to a club where businesses traded goods and services using a fiat monetary system. The idea was not to replace the dollar in its entirety, but rather to increase dollar liquidity by offloading some expenses to this fiat money. It works great during times of economic downturns because this frees up more real dollars that might need to be spent on more important things that lie outside the reach of the barter club. These barter transactions are subjected to taxation though, just the same as one would be using actual US dollars.

In essence it's just an alternative medium of exchange that has no redeemable value outside the realm of the barter club itself. IMHO it helps stabilize local economies when the dollar begins to inflate and loses it value. Businesses within the barter exchange can adjust their pricing model for some good and services without having to tie it to the dollar (even though most of the time it is anyway).

Viracocha
02-23-2008, 11:38 AM
About 15 years ago I used to be an account executive for a regional barter exchange. It works great during times of economic downturns because this frees up more real dollars that might need to be spent on more important things that lie outside the reach of the barter club.

In essence it's just an alternative medium of exchange that has no redeemable value outside the realm of the barter club itself. IMHO it helps stabilize local economies when the dollar begins to inflate and loses it value. Businesses within the barter exchange can adjust their pricing model for some good and services without having to tie it to the dollar (even though most of the time it is anyway).

rvkpa
02-23-2008, 11:43 AM
This is a real example from when I was in college. You could literally create income out of nowhere that you couldn't pay back with that rule. I have a large amount of ingame currency "gold" in World of warcraft. My friend is trying to get an extremely expensive item in the game that could take weeks to farm for. I need a ride to work so I give him a sum of warcraft gold. Under this definition He should pay taxes on his gold. Am I right? Seems a bit excessive.

Libertytree
02-23-2008, 11:58 AM
Do it on the sly, they can't know everything that goes on. A handshake or a verbal agreement leaves no paper trail. It goes on everyday with us regular folks and they can't do shit about it.

rvkpa
02-23-2008, 12:03 PM
We shouldn't have to subvert the system. It should work the way it is and not have rediculous requirements.

amy31416
02-23-2008, 12:10 PM
Do it on the sly, they can't know everything that goes on. A handshake or a verbal agreement leaves no paper trail. It goes on everyday with us regular folks and they can't do shit about it.

Word. Hell, nobody even has to know your real name in barter transactions. :cool: