Barter 
, as defined by wikipedia, is “a type of trade in which goods or services are directly exchanged for other goods and/or services, without the use of money .” Current economic uncertainty and the lack of ready credit have encouraged an upswing in barter transaction by both businesses and individuals.
Trade of goods and services between individuals has traditionally be viewed as neighborly and community building. With the advent of e-trade, trade and barter within the larger e-community has become an attractive business alternative. Barter Exchanges have proliferated as spin-offs of traditional trade associations.
Barter Exchanges who are members of such organizations as the National Association of Trade Exchanges (NATE), monitor transactions for IRS reporting compliance, work to insure fair trade values, and provide vehicles for national and international exposure.
Although other countries do not have mandatory reporting of bartering transactions, the IRS considers barter and trade to be taxable revenue. The IRS actively reviews these activities for accuracy of reporting under the Tax Equity & Fiscal Responsibility Act of 1982 . Transactions are reported on form 1099-B.
Businesses who utilize barter as part of their business plan need to research the benefits and liabilities of the practice. Clearly, a percentage of transactions need to be cash transactions in order to meet tax obligations. Businesses or individuals with whom bater or trade is conducted need to earn a high level of trust to insure fairness.
Additional Information and Resources
E-articles about barter and trade topics.