I’ll Trade You My Tax-Code Knowledge …

As the economy flails, more cash-strapped consumers are embracing ye olde practice of bartering, often facilitated by that most modern of marketplaces, the Internet. Bartering is way up on Swaptree, Zwaggle and Craigslist, where, for example, a user in Memphis, Tenn., is looking to trade a new pair of boots for a kitchen faucet. But there’s a complication to all this happy swapping: the IRS views bartered goods and services as reportable income. The agency has even set up the Bartering Tax Center. So does everyone need to report every little swap? “There are no tax implications for the type of bartering happening on our site,” says Carl Schwartz of Swaptree, which trades only books, CDs, video games and DVDs. The rule of thumb, according to the IRS: if you’re bartering something you might otherwise sell at a garage sale, there’s generally no need to report it. But if you’re bartering instead of taking money from a client, you’re supposed to report it.