Business Barter Question

[Dmommy]

Business Barter Question - More Information Added

What is the name of your state (only U.S. law)? Illinois

An auto repair shop represented one of their customers who had a vehicle for sale. Our nonprofit organization bought the vehicle. It needed repairs so after the purchase the repair shop asked if we wanted to barter. One of our volunteers is a website designer and they wanted a website in exchange for repairs.

The repair shop fixed some things and our organization agreed to pay for some of the repairs, which we did in full. When the repair work was finished, I asked the repair shop to provide a receipt so that our web designer would have a gauge to perform the website work and provide an equal/fair trade.

The repair shop provided me with a receipt for the repairs and:

1. Included the cost for something they didn't fix
2. Included charges for things that they did prior to making the barter offer/agreement (i.e. taking photos of the vehicle and emailing them to me, a service call/pickup they made to the seller's residence a block away and returning it when finished)
3. Added the cost of supplies
4. Added sales tax as part of the total

We're only talking about $500 but they counted every nut and bolt and have basically inflated their share in the first place. Since I know we can't argue those things, am I correct to subtract what they didn't fix? And, can they actually include stuff that they did prior to selling it to us and add supplies and sales tax or can I subtract that as well?

 

[FredFlintrock]

What is the name of your state (only U.S. law)? Illinois

An auto repair shop represented one of their customers who had a vehicle for sale. Our nonprofit organization bought the vehicle. It needed repairs so after the purchase the repair shop asked if we wanted to barter. One of our volunteers is a website designer and they wanted a website in exchange for repairs.

The repair shop fixed some things and our organization agreed to pay for some of the repairs, which we did in full. When the repair work was finished, I asked the repair shop to provide a receipt so that our web designer would have a gauge to perform the website work and provide an equal/fair trade.

The repair shop provided me with a receipt for the repairs and:

1. Included the cost for something they didn't fix
2. Included charges for things that they did prior to making the barter offer/agreement (i.e. taking photos of the vehicle and emailing them to me, a service call/pickup they made to the seller's residence a block away and returning it when finished)
3. Added the cost of supplies
4. Added sales tax as part of the total

We're only talking about $500 but they counted every nut and bolt and have basically inflated their share in the first place. Since I know we can't argue those things, am I correct to subtract what they didn't fix? And, can they actually include stuff that they did prior to selling it to us and add supplies and sales tax or can I subtract that as well?

I believe the answer is no, they cannot charge for anything that was done prior to the barter agreement. They wanted to sell the car and were doing what they needed to in order to do that - getting it ready and marketing or whatever.

There's no tax on a barter either. That's why it's a barter. However, I'm not sure about supplies because I think some repair shops do that nowadays.

F

 

[tranquility]

There's no tax on a barter either.

Do you do your own taxes? Maybe you should look into a tax professional.

Barter income is income. The amount "paid" may be the cost of the person doing the services. Here, the value of the repairs is the income and the eventual cost to the organization of the webdesigner's work would be the cost. The difference is the income.

A non-profit organization that "barters" something of value for the work of one of its volunteer members will get income and not have anything for the cost.