2016-12-14 00:00:00TaxesEnglishLearn how the Canada Revenue Agency treats trade and barter transactions, and review how to report these transaction on your tax return.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/woman-looks-at-fabric-as-part-of-barter-exchange.jpgDocument Barter Exchanges

Document Barter Exchanges

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As a small business owner or freelancer, you may occasionally find yourself trading your products or services for another individual’s products or services. This can be a quaint but efficient transaction. For example, you may redo the hardwood floors in someone house’s in exchange for a year’s worth of organic chicken eggs. Alternatively, you may cater someone’s wedding in trade for their old jet ski. The possibilities are endless, but it’s critical to know that the Canada Revenue Agency treats barter transactions as if they are cash. You may barter and trade in your personal life with no tax consequences, but if you barter and trade products or services that you normally sell as part of your business, you must report those transactions. Make a note describing the transaction for your records, and include the fair market value of the item received as business revenue on your tax return.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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