We have instagram influencers who keep the goods we send them as payment for their services. I understand that we need to report this payment on a 1099, but:
We use cost basis for our accounting, and were prepared to use the cost of the goods sent to these contractors both in our accounting system expense accounts as well as the 1099's sent out. However I see a lot of chatter about using "fair market value" in these kind of exchanges. Bottom line we want to use cost, not FMV as that's a whole subjective gray area mess for us as well as our contractors.
And I read these gems elsewhere:
"If the parties agree to the value of the services in advance, that will be considered the fair market value unless contrary evidence exists."
"The value of the goods or services can be an amount you and the person you are bartering with agree upon, unless it can be proven otherwise (such as through the open market)."
So my question is:
If we agree the cost of these goods is fair exchange of value for each of us, are we good using the costs on the 1099?
