We are a retailer of goods that pays a variety of our contractors for their services with the goods that we sell, rather than cash. Examples: advertisers, IT contractors, etc.
We realize we need to issue 1099's to our contractors to represent the value of the goods we sent them, and that they are required to report that as income. However my question is this:
Do we also need to report the value of the services we received (in exchange for these goods) as "income"? This doesn't make sense to me because if we paid cash we would just code these as business expenses on our end, and we are looking to do the same with the value of the goods we are spending for these various business expenses (various contractor services).
