Actually the barter income is reported on the Sch C and the expenses are deducted even if they are a wash. Since you have to issue a 1099 to them that will balance out the Sch C correctly. The rules are clear ... read them here : https://www.irs.gov/taxtopics/tc420#:~:text=Reporting%20Bartering%20Income,from%20Business%20(Sole%2...).
