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Posted by Mark Bole on April 23, 2008, 8:11 pm
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Ernie Klein wrote:
> For what? $1K of barter income or $6K?
$6K. Gross revenue. How could the landlord possibly know whether the
tenant realized a profit or loss on the work?
The payer (landlord) has no idea what the tenant did or paid to provide
the agreed-upon improvement, he only knows he agreed to a barter in an
arm's-length transaction.
If the landlord was specifying how much the tenant could spend on
materials, that would be more like an employer-employee relationship,
and you don't want that.
> How does he tell the IRS that that he only received $1K of
> income?
Schedule C-EZ. The recipient gets to document expenses, which result in
taxable net profit.
Or, report it whatever way is correct for the facts and circumstances,
and attach a statement explaining it.
-Mark Bole
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