KochuK
Employee Tax Expert

Business & farm

Hi mtwaynew, 

Thank you for your question.

Here are some quotes from IRS.

Quote

Bartering is an exchange of property or services. You must include in your income, at the time received, the FMV of property or services you receive in bartering. If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as FMV unless the value can be shown to be otherwise.

Unquote

Page 20 of https://www.irs.gov/pub/irs-pdf/p525.pdf

Please also refer to Example 23 on Page 20. 

 

Quote

Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

Unquote

Page 2 of https://www.irs.gov/pub/irs-pdf/p561.pdf 

 

Your goods can be sold on the open market for certain dollar amount (not your cost basis), and the receivers of your goods, if willing,  can re-sell on the open market. Hence my opinion - the FMV.

 

Hope this helps.

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