Are Trade Exchanges Legal?
Absolutely! Bartering through a trade exchange is perfectly legitimate, and a reputable exchange will not allow illegal transactions.
We comply fully with IRS rules regarding tax reporting. It is no longer true that you’ll be audited because of bartering.

HOW DOES TRADING AFFECT MY TAXES?
Trading is a taxable event. According to the Federal government, buying and selling through the network is no different than completing cash transactions. The network will issue you a 1099B at the end of each calendar year reflecting your sales. Of course, all of your purchases, and fees paid to the network, are tax deductible expenses.

Sales tax is not traded. As the seller in a trade transaction, Your State Government expects you to remit sales tax. Therefore, the sales tax will be paid to you directly by the buyer, in cash. County government will expect to be paid for licenses and permits. When buying from a member who is a licensed contractor, please expect to pay for all necessary licenses and permits in cash. The contractor will "pull" the permit, and hand your check to the County government. Always feel free to ask for guidance on any of these issues.

Non-Profit Organizations

What does a non-profit organization have to do with barter?
By donating your usable excess inventory or other non-cash contributions (such as barter credits, boats, real estate, books, furniture, etc), the donated items can be exchanged by the member foundations for other items needed by their organization and others like them to obtain the things needed to reach the goals of their particular "mission".

When you donate these items you will receive a tax deduction and receipt for the full fair market value at the date of gift. In order for all gifts of personal property with a value over $500 to be deductible by the donor, the item must have:

1. An independent appraisal: and
   
2. The completion of IRS Form 8283 (Non-Cash Charitable Contribution) to accompany your federal income tax return.
   

When donating to a Foundation under the National Heritage Foundation, prior approval from NHF is necessary before any gift is received by the foundation.

BoA Merchants Code of Ethics

At Barter of America.com, Inc., we have established policies of trading to ensure that all parties involved are protected in a transaction and the trading process is fair to everyone. These policies are the backbone of our network and give strength to our exchange. By adhering to these policies we are able to make the system work for you. If you encounter a business which is not trading properly - DO NOT TRADE WITH THEM. Please notify us immediately so we may review our trading policies with them.

Our three main policies of trading are explained in detail below:

1. First Line Products - Basically, every item or service offered for cash is also offered for trade. We believe in our promise to generate you new business and the perception created when restrictions are placed on certain items within an exchange is that it is not as good as cash because it's on trade. We avoid this negative appearance to trade by requiring the sale of all first line products within our exchange.
   
2. Prevailing Prices - This is defined as the most commonly offered price, whether it be cash or trade. This includes sales prices prior to any additional negotiations. This means that if a retail store is having a sale, then the sale prices should be honored on trade. Also remember, in the cash world, one business may charge more than another business; this holds true for the trade world as well.
   
3. 100% Trade - At BoA we manage a 100% trade economy requiring sales to be done on a full trade basis. We do not allow part cash, part trade transactions. In order to have consistency within the exchange and to treat all clients fairly, it is important that the principle of 100% trade be upheld.
   

To more easily facilitate transactions, BoA utilizes a plastic membership/ID card. In addition, BoA provides all members with a monthly account statement, membership updates and a yearly 1099 tax form, since trade income must be reported to the IRS like regular cash income.