# Bartering



## swmnhay (Jun 13, 2008)

Starting a new thread on bartering it has been discussed a lot lately in other threads.

No matter how hard you try to make it even it never is.Someone is always on the short end of it.Wether it is borrowing something or tradeing labor.

Had a guy starting farming 10 yrs ago approach me and want to trade labor for using my eq doing his.Well he told me onetime he had to cut a 4 acre patch,told him to go ahead it was hooked up.It didn't come back for days and then my hired man told me my tractor was cutting a 30 acre hay field 10 miles away.And when he did bring it back with a 1/2 tank of fuel and I put cutter in gear it vibrated to beat heck.He had been running it with a blade/holder missing.

I've helped others doing stuff and always seems they are to busy when you want help in return.Hunting,kids stuff,or a 2nd cousins kids 5th b-day party. 

Don't get me wrong I help out a lot of friends and expect nothing in return but when it comes to farming it has become harder and harder to barter with the high costs of owning,maintaining eq.

It used to be a common practice to borrow the neighbors flatracks when sm sq baleing hay here yrs agne neighbor was good for borrowing racks but if you wanted to borrow one his were stacked 2 high and in the back of the shed as soon as he was done with them.


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## Dill (Nov 5, 2010)

I've got one friend that we swap kicker racks around quite a bit. I put most of my first up as silage and 2nd as small squares, he does the opposite. It works slick.

Then again my father baled a friend out of jam last year, when his old round baler gave up the ghost. Then the guy complained how many more bales there were to pick up since we run a 4x4 and not a 4x5.


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## JD3430 (Jan 1, 2012)

I couldn't get by without bartering. The guys I barter with I know well enough to sense when they think they ain't getting a fair deal and I also let them know when I feel same. 
The way I do it, we always make sure we make a "verbal contract" up front. Each guy does his part and then we hit the reset button. No "carry-over" favors. 
To avoid feeling like one gets the short end, you don't make a promise to do something a month from now after someone does something for you today. It can build animosity.

We borrow each others trailers, equipment, etc. works awesome and sure beats paying to rent or buy. 
In the end, you have to barter with people you've known a long long time.


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## rjmoses (Apr 4, 2010)

I agree: I won't barter!

If it's an even deal, I'll write you a check; you write me a check!

Two reasons:

First, no deal is even really even. You might think your time is worth $50/hr and my time is worth $5/hr--so right there we're out of balance.

Second, the IRS frowns on barter big time. While I have nothing to hide, I don't want to give them a reason to go digging. I don't want to spend the time, energy or anxiety dealing with them!

Ralph


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## JD3430 (Jan 1, 2012)

Screw the IRS and Lois Lerner, too. Nobody ever needs to know if I barter and why the heck would I tell those clowns IF I ever did barter? 
They spend plenty of time getting over on working stiffs like us.
They tax your wealth and redistribute it mostly to people too lazy to work.


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## Teslan (Aug 20, 2011)

IRS doesn't really frown upon it, but wants you to report it as income and expense. Which in my mind defeats the whole purpose of bartering.


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## JD3430 (Jan 1, 2012)

rjmoses said:


> I agree: I won't barter!If it's an even deal, I'll write you a check; you write me a check!Two reasons:First, no deal is even really even. You might think your time is worth $50/hr and my time is worth $5/hr--so right there we're out of balance.Second, the IRS frowns on barter big time. While I have nothing to hide, I don't want to give them a reason to go digging. I don't want to spend the time, energy or anxiety dealing with them!Ralph


Maybe it's not, but if you barter enough, it evens out in the end. 
Example: buddy of mine likes to make money on the side with his compact backhoe. He charges "friends" $75/hr. he hates spending money on hay for his and his wife's horses. He knows I charge $75 for a 4x5. Perfect barter for us. 
Neighbor of mine borrows my truck for 2 hours to pick up supplies for his property. He has an old classic Jaguar XJ-12 convertible we really like. He borrows my truck and I'll borrow his car to take my wife on a fun date. 
I think he may be getting the better end sometimes because the old jag convertible breaks down about every 7 miles of driving.....lol


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## mlappin (Jun 25, 2009)

I rarely if ever barter, can't write it off as an expense. If the other person doesn't realize that then I really don't want to deal with them.

Write me a check, and I'll write you a check, we're both covered then.

I need the expenses for tax purposes, trying to use bartering just opens up a HUGE can of worms.


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## somedevildawg (Jun 20, 2011)

I very rarely barter, tho I'm certainly not against it.....it's just that horsey owners don't have anything I want.....well, there are a few that.......never mind, I love my wife! Stick a needle in my eye.....


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## mlappin (Jun 25, 2009)

somedevildawg said:


> I very rarely barter, tho I'm certainly not against it.....it's just that horsey owners don't have anything I want.....well, there are a few that.......never mind, I love my wife! Stick a needle in my eye.....


LOL, I've yet to meet one that...well you know.

I know opposites attract but there just ain't something right their, if your gonna spend that much feeding it, then eat the damn thing already.


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## rjmoses (Apr 4, 2010)

JD3430 said:


> Screw the IRS and Lois Lerner, too. Nobody ever needs to know if I barter and why the heck would I tell those clowns IF I ever did barter?
> They spend plenty of time getting over on working stiffs like us.
> They tax your wealth and redistribute it mostly to people too lazy to work.


A business I know set up a training program where the "employees" worked so many hours/week for the business and, in return, received so many hours of training per week.

This sounded like a real good deal, and it was, for both the people and the business.

The IRS came down on them unbelievably hard! I don't know all the details, but it almost put them out of business. They had to come up with all the withholding taxes (FIT, SS, Medicare) for all the people who was in their program plus a lot of penalties. I can't imagine what the paperwork hassle might have been like!

Ralph


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## Lostin55 (Sep 21, 2013)

I have bartered the use of equipment that I didn't have. I trade regularly with a farmer up the road. We both have equipment that the other does not so it works out very well. I have never worried about checking the hour meter and neither has he.

On the other hand, I have also had trades that did not go well. I traded the use of a newer dozer of mine for telephone poles once. The dozer was run for three weeks and the stack of phone poles was much smaller than it originally was by the time I got there to pick them up. Sometimes you win, sometimes you lose but it all works out in the end. If someone continually wins, I am less likely to barter in the future.

I have traded equipment use for services and goods, and those trades generally are very good for both of us. I have cleaned corrals with the bobcat in exchange for shoeing of horses, traded cattle for breaking colts, and traded bobcat use for a new set of custom ******.

I guess that I don't see a lot of difference between trading cash for something or trading time and work for something, other than the tax implications mentioned above.


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## JD3430 (Jan 1, 2012)

mlappin said:


> I rarely if ever barter, can't write it off as an expense. If the other person doesn't realize that then I really don't want to deal with them.
> 
> Write me a check, and I'll write you a check, we're both covered then.
> 
> I need the expenses for tax purposes, trying to use bartering just opens up a HUGE can of worms.


Yeah, but if you barter you have no expense, or no check to write! 
After all, thats the whole idea of bartering in the first place.
I've been bartering for 25 years.....no worm cans laying around my place. Lol


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## mlappin (Jun 25, 2009)

Yes true on the no paper trail part of bartering, but now you also don't have a proven expense to use against the income made by selling the hay.


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## rjmoses (Apr 4, 2010)

Here's my thinking:

IRS auditors are trained to get people talking about other things so that they slip and make a mistake by saying something that gives them away. Once the door is open, they can go digging without mercy.

They might say something simple, like "I had an uncle that I used to help put hay. He always paid us kids cash. Those where fun days. Do you ever get kids to help you?"

If you say "Yes", you're dinged. You better have the paper trail.

If you say "No", he'll ask "Well, how do you get the hay in the barn." Oops--better have an honest answer or the trap has slammed open and you just gave him permission to do a colonoscopy on you.

Ralph


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## JD3430 (Jan 1, 2012)

Never go to an audit without an accountant or preferably a tax lawyer. Let THEM do the talking. Shut your mouth and go make iced tea.
Let them find something small wrong and don't fight it, then they usually will leave you alone. They'll leave your office, cheap shoes squeaking all the way to their government supplied car.


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## Teslan (Aug 20, 2011)

rjmoses said:


> Here's my thinking:
> 
> IRS auditors are trained to get people talking about other things so that they slip and make a mistake by saying something that gives them away. Once the door is open, they can go digging without mercy.
> 
> ...


I would say. Can't find kids that want to work that hard these days. The only people that want to do that kind of work are from south of the border..........oops!


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## JD3430 (Jan 1, 2012)

Tell you when bartering works best is when it's for a piece of equipment that you only use 3-4 times a year. Not worth buying, expensive to rent.


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## mlappin (Jun 25, 2009)

JD3430 said:


> Never go to an audit without an accountant or preferably a tax lawyer. Let THEM do the talking. Shut your mouth and go make iced tea.
> Let them find something small wrong and don't fight it, then they usually will leave you alone. They'll leave your office, cheap shoes squeaking all the way to their government supplied car.


Not sure if this is true, but I've also heard take all your receipts and I mean all business receipts, dump em in a shoebox then let the auditor dig thru em, they find a few that match your books and they'll call it good quicker instead of sorting the whole damn box out.


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## mlappin (Jun 25, 2009)

Almost forgot, my Mom was a fuel tax auditor for the state of Indiana. A rather well known local religious group owned united limo and tried to claim that since it was church owned they didn't have to pay fuel tax. Mom's argument was since they ran the bus company for profit it was taxable. Went to court, she nailed em for 5 million in back taxes. Moral of the story is also don't tell the auditor their job.


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## JD3430 (Jan 1, 2012)

I remember my old man getting audited about 35 years ago. 
After it was over, he said they disallowed him buying shoes with company funds. 
Pop thought buying steel toe shoes was a perfectly acceptable use of funds, but his accountant said to him "let him tag you for the work shoes and he'll have his little power trip and then leave you alone" 
He was right. My dad paid a small penalty and it was over.


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## Nitram (Apr 2, 2011)

mlappin said:


> LOL, I've yet to meet one that...well you know.
> 
> I know opposites attract but there just ain't something right their, if your gonna spend that much feeding it, then eat the damn thing already.


The horse right?


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## mlappin (Jun 25, 2009)

Nitram said:


> The horse right?


Yep


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## Tim/South (Dec 12, 2011)

Dad and I went through 4 audits, 4 years in a row. It was back in the day when a person could turn you in and get a percentage. Ended up a fellow Dad worked with kept turning us in.

They never found anything wrong, got a clean bill of health each time. Dad kept meticulous records. They would ask about an expenditure and Dad would show them the receipt. It really was not a bad experience.

The biggest question they had one year was we were not selling any calves. We traded our bull calves to a neighbor for his heifers. That did not make sense to them. After we explained they understood.

Dad had a well paying job with a large company. We could not afford to sell calves because he was in a 50% income tax bracket. We just kept growing the herd and basically working for nothing. But we had a lot of fun.


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## Bgriffin856 (Nov 13, 2013)

mlappin said:


> Yep


For that money that would be the last thing i would be e.....never mind. My mind has been dragged through the barn cleaner and out the manure spreader more than a few times


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## Bgriffin856 (Nov 13, 2013)

We barter some. Works well usually it isn't anything big just little things and with people we trust and can make it even. Now there are people i refuse to do business with. Usually the users and cheap deadbeats


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## urednecku (Oct 18, 2010)

mlappin said:


> Not sure if this is true, but I've also heard take all your receipts and I mean *all business receipts, dump em in a shoebox then let the auditor dig thru em, *they find a few that match your books and they'll call it good quicker instead of sorting the whole damn box out.


One of my ex-tax prepare-rs was a retired auditor. He told me if somebody did that to him, he would tell them to sort them out themselves - IF they wanted *him* to use them for the audit. (The only reason he's not still my tax man is he has totally retired. )


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