The IRS Treats the Fair Market Value of Bartered Goods and Services as Taxable Income
The Fact
The Internal Revenue Service says bartering — trading goods or services without exchanging money — is generally taxable. The fair market value of goods and services exchanged must be included in the income of both parties.
What This Means
Trading work or goods with neighbors is legal. It is treated like being paid.
Why It Matters
Private trade can stretch a household budget; knowing the tax rule keeps it from becoming a problem later.
Sources
Internal Revenue Service. “Topic No. 420, Bartering Income.” https://www.irs.gov/taxtopics/tc420