Is this considered income?

[xylene]

Thanks everyone. I know he will offer to let me use the machine forever with some kind of agreement signed on a napkin..

That's tax fraud.

 

[cvap]

That's tax fraud.

Yes probably, but is it not the same as saying I will wash your car if you mow my lawn?

 

[Zigner]

Yes probably, but is it not the same as saying I will wash your car if you mow my lawn?

So, to you tax fraud is ok just because it's similar to (or the same as) another form of (possible) tax fraud?

 

[xylene]

Not to mention that your friend is an idiot to agree to this charade which would reduce his cost basis on the land which would then burn HIM when he goes to sell. So, on top of a scheming tax fraud, you are just buck passing, which seems like a jerk move.

 

[cvap]

So, to you tax fraud is ok just because it's similar to (or the same as) another form of (possible) tax fraud?

No, I just don't think a barter should be a taxable event. It probably happens a million times a day across the country.

 

[xylene]

No, I just don't think a barter should be a taxable event. It probably happens a million times a day across the country.

there are plenty of platforms, both right and left leaning for you to air your opinions and grievances on this subject.

 

[cvap]

Sorry, just venting about thin margins I guess. I'd better just go to work!!

 

[FlyingRon]

No, I just don't think a barter should be a taxable event. It probably happens a million times a day across the country.

Whether you think it should is immaterial. The law and the IRS considers it income.

 

[cvap]

Not to mention that your friend is an idiot to agree to this charade which would reduce his cost basis on the land which would then burn HIM when he goes to sell. So, on top of a scheming tax fraud, you are just buck passing, which seems like a jerk move.

This statement was not necessary. The whole idea was my "idiot friend's", not mine. Some of my posts might be stupid but are not inflammatory. I am scheming or passing nothing. You told me the machine was to be treated as income and we both should have left it at that.

 

[Taxing Matters]

No, I just don't think a barter should be a taxable event. It probably happens a million times a day across the country.

Barters are of course taxable events and need to be in order to avoid undermining the income tax system. Bartering is an exchange that in economic terms is just the same as if cash was used — you are getting something of value, whether it is cash or something else, in exchange for giving up something you own — so there is no logical reason to exclude barter transactions from income tax. I have yet to hear a good logic argument for excluding bartering from income tax. Remember that economically cash is nothing special; it is simply an item of value like anything else.

 

[LdiJ]

Barters are of course taxable events and need to be in order to avoid undermining the income tax system. Bartering is an exchange that in economic terms is just the same as if cash was used — you are getting something of value, whether it is cash or something else, in exchange for giving up something you own — so there is no logical reason to exclude barter transactions from income tax. I have yet to hear a good logic argument for excluding bartering from income tax. Remember that economically cash is nothing special; it is simply an item of value like anything else.

This is slightly off topic but I am interested in your opinion of whether or not this was barter. Many years ago both my dad and his neighbor wanted a riding mower, and both my dad and his neighbor wanted a wood chipper. The two of them agreed that one of them would buy the wood chipper and one of them would buy the riding mower and that they would share them, which they did for the rest of their lives. In your opinion, was that a taxable barter?

 

[Taxing Matters]

This is slightly off topic but I am interested in your opinion of whether or not this was barter. Many years ago both my dad and his neighbor wanted a riding mower, and both my dad and his neighbor wanted a wood chipper. The two of them agreed that one of them would buy the wood chipper and one of them would buy the riding mower and that they would share them, which they did for the rest of their lives. In your opinion, was that a taxable barter?

No, it was not a barter transaction. There was no exchange of property between them. Each one bought an item and allowed the other the use of the item he bought.

 

[LdiJ]

No, it was not a barter transaction. There was no exchange of property between them. Each one bought an item and allowed the other the use of the item he bought.

That is what I thought. Thank you for the clarification.