Bartering is Taxable
Tax laws that apply to bartering! The IRS says that you must include in your income the fair market value of property or services you receive through bartering, at the time received. Typically, you must report his income on Schedule C or Schedule C-EZ. Because there are some gray areas in bartering, any small business owner expecting to generate significant income this way should consult with a tax lawyer. There's no sense trading services to save money if you're only going to pay penalties to Uncle Sam later.