The $1300 is reportable income, not an expense. Per the IRS, when one product or service is exchanged for another, both parties must report the fair market value of the product or service they get as income on their tax return. I think the income could be reported as self-employed business income on Schedule C, which would result in a Schedule SE. IMO the poster, if challenged by the IRS, can make a good case that the teaching is a business and not a hobby - even though it is admittedly a bit of a gray area. The poster should be able to demonstrate some objective basis for his $1300 FMV estimate.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
