Do you have to pay taxes on things you trade for?
do you?
shareThat's what I was wondering. It seems a bit ridiculous to me. I just did a search for "taxes on bartering" and the first thing that popped up was a government website which says, "Bartering transactions are taxable." Various websites go into detail on how to include it when you file your taxes. I don't make a habit of trading/bartering myself, but if I ever do, now I know it's supposed to be reported.
just seems kind of ridiculous because the items have already had taxes paid on them. Also If it is just by honor system then Id claim the lowest amount possible.
shareSeems to me if you are in fact "trading" the value of whatever is involved is of equivalent value. Meaning no party involved has gained lost or gained value. So what is there to tax?
shareCome now, you could say that about anything. What about wages? Your employer thinks you're worth $x per month so he pays you that amount, and in exchange you give him a certain amount of work. It's a trade; it's barter.
Double and even triple taxation happens all of the time, even today. For example, you buy a new TV. You pay sales tax on it. After a while, you decide to get a bigger TV, so you sell that first set to a hock shop so you can earn some money to go towards that new set. The shop puts it up for sale and, yup, they will charge sales tax on it when it is sold... even though you previously paid tax on that same TV. Another example: I get my paycheck, which is net of income taxes deducted at source. I go to a restaurant with that money, enjoy a nice meal, and leave (of course!) a generous tip. The waitress who gets that tip will, eventually, have to declare that amount (which has already been taxed, remember) as income, which will (likely) get taxed on her tax return. And on and on and on...
share