Surviving In Today's Economy Using Trade And Barter. (Part II)
Is it legal to barter? The IRS says YES! When the "fair market value" of a barter is included in your gross income for the year, it is taxed the same as cash. Also, you are allowed to deduct barter expenses, the same as other business expenses. Keep good records, because barter is treated like cash. You are better off bargaining/bartering and paying applicable taxes, than not, just to avoid taxes.
Is trading through a trade exchange legal? Again, the answer is YES! In 1984 the TEFRA Act was changed to include Trade Exchanges, such as ICRE. Trade Exchanges are considered a third party record-keeper, on par with banks and credit card companies. ICRE reports the gross credits earned by members using a lO99b form, just as banks are required to report the interest on your savings using a 1099 form. Trading and bartering increase your productivity greatly. Taxes are a small price to pay for the expanded benefits.
Effective use of trading and bartering can give you an additional 20% of your gross, net! How is this possible? Most companies across America are not achieving their maximum productivity. A lot of companies are only at 60-70% productive. When this is the case, these companies can increase their productivity "through proper use of trading and bartering" as much as 20% without having to increase their fixed costs, such as rent, salaries, utilities, etc. This means that as long as these companies collect their variable cost attributed to this new business in cash, and barter or trade their profit, that barter or trade becomes"net barter or trade in reserve"! Anytime companies exchange this net barter or trade dollars on any fix or variable expense, the cash saved (or not spent) goes to the bottom line in the form of "net cash retention". There are companies that would gladly do business with you under these circumstances that are currently dealing with your competitor.
How do I know that when I engage in trading or bartering, I won't get "ripped off"? All you can do is be careful and use the same discretion you would use if you were doing a cash transaction. Check the references of people that you don't know. Also, look at the quality of their previous work. One of the many benefits of being a member of a Trade Exchange is, in most cases, the Exchange has had experience with most of its' members. You may also want to check prices outside of the Exchange, prior to using the Exchange. With an outside estimate, you can usually "lay your cards on the table" with fellow members of lCRE. They generally match or beat a competitive price and accept your Credit Dollars for part or full payment.
How do I barter or trade for gasoline? In order to barter for gasoline, you must have something to use as barter. Take inventory of your tradable assets or services, including miscellaneous items and put your cash asking price on the list, too. This list could also include goods, services and assets of people that owe you money and are slow paying. Make copies and keep this list with you. When you find a gasoline retailer, show or leave them your list. You could have a CD player available on the list, for example. The gas retailer may want the CD player and still keep his cash, but we both know that they can give you a line of credit to buy gas.
What happens if I do not have any barter or the gas retailer doesn't "want anything on my list? That's were trading comes in. You can affiliate yourself with a Trade Exchange like ICRE. Once you do this, everything in the exchange is at your disposal. For example, ICRE has over 20 restaurants. You can sell items on your list for Credit Dollars easily. You can use Credit Dollars to purchase anything on the Exchange, and this really expands your options! Presently, the Exchange has over 1,200 products and services available.
But, what if I don't have anything to trade or barter; I still need the gas! ICRE can still help, since most ICRE members have no cash tied up in acquiring their credits and they may have some surplus Credit Dollars. They are willing to sell their credits for cash. The current purchase rate is 50 cents on the dollar, so you could purchase items from an Exchange Member, trade it for the gas, and your cash cost could be reduce by as much 50%. Stay tuned!