The IRS and Bartering

I had never really given the "tax" implications of "barter" any thought until today. While scrolling through the various MSM shows this morning I came across a story being done on all the bartering web-sites popping up on the internet.

The lady being interviewed stated that "bartering" must be reported on your income tax! I went to the IRS website, and sure enough, it states ...

Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter - barter for another’s products or services - you will have to report the fair market value of the products or services you received on your tax return.

Here's the link .. www.irs.gov...=188095,00.html

So given this statement ... my question is ... if Barter dollars or trade dollars are identical to real dollars ... when the real dollar collapses does that mean the "barter/trade dollar" can no longer be taxed??

[edit on 4-3-2009 by cnichols]

In light of the fact that I have noticed quite a few people pretty much stating ... Barter! Trade! The government can't do anything about that! ... I thought I would bring this topic back up.

Unfortunately, the government CAN do something about it. In reading the "Lose your property for growing food?" thread I also noted someone mentioning a little known "ruling" that can also run into this particular type of transaction and could result in bad things happening to you. This quote was posted by jdub297 ..

See: Wickard v. Filburn, 317 U.S. 111 (1942).

The "Commerce clause" reaches into your very own pocket. Anything you do that "affects commerce" (or doesn't, as in poor farmer Filburn's case) allows the feds to regulate your activities.

(source thread) www.abovetopsecret.com...

So I would think if you are "trading" and not reporting it to the IRS they could very well consider this "affecting commerce" and do what ever they want to "punish" you....

Anyone else have any thoughts on this?

Oh yeah, and in regards to my original posting ..

If the dollar suffers "hyper-inflation" and a loaf of bread costs $35 and you trade a loaf of bread for a basket of bannana's does this mean you have to report that $35 since that's the current market value?