When does barter create taxable income?

Barter can create taxable income when a taxpayer receives goods or services in exchange for goods or services. If taxable, the amount is generally measured by the fair market value of what the taxpayer receives.

Business barter is the cleanest exam case. If a self-employed web designer builds a site for a restaurant and receives catered meals worth 900, the designer generally has income measured by the meal value.

An informal noncommercial exchange among neighbors may require a different analysis. Do not jump straight to a tax number until you decide whether there is a taxable exchange, a business context, or merely reciprocal personal help.