barter with renter


K

kmh

I made a barter contract with a renter to exchange $4000 of his labor
for $4000 of rent.

I think I understand that if everything had gone correctly I would
have claimed $4000 of income for the barter and then could have
deducted the $4000 as an expense for repairs to the rental unit.

The messy part comes about because the renter did not do the work.

SO now I do not have any income from the barter but I think I still
generate a 1099-MISC for $4000 because the renter received his art of
the barter as free rent (which is barter income for him).
After all, he isn't just a dead beat renter who didn't pay his rent
depriving me of income.
He actually made a contract separate from his lease for the barter.

Am I on the right track?

Can I somehow write this off as an uncollected debt?
I of course still get my regular expenses for those months since I
still had to pay the mortgage, etc.
And I have receipts for the work that I had to have someone else
actually do.
I want to make sure this guy has more than just a civil decision
following him around in the form of the 1099 putting the IRS on his
ass.

Thanks in advance,
Ken
 
Ad

Advertisements

M

Mark Bole

I made a barter contract with a renter to exchange $4000 of his labor
for $4000 of rent.

I think I understand that if everything had gone correctly I would
have claimed $4000 of income for the barter and then could have
deducted the $4000 as an expense for repairs to the rental unit.
OK so far.
The messy part comes about because the renter did not do the work.
Why did you continue to let him live there rent free after the first month?
SO now I do not have any income from the barter but I think I still
generate a 1099-MISC for $4000 because the renter received his art of
the barter as free rent (which is barter income for him).
After all, he isn't just a dead beat renter who didn't pay his rent
depriving me of income.
He actually made a contract separate from his lease for the barter.
I'm not a lawyer, but it sounds like the contract has not been
fulfilled, or in other words no barter exchange actually happened. What
did the contract say as far as cancellation, penalties, and so on?
Can I somehow write this off as an uncollected debt?
No, because you never included it in income. See Pub 535 for discussion
of business bad debt. The next question is, do you have a rental
expense for repairs that you "paid" for but didn't receive? That might
come back to what is ordinary and necessary -- what was the nature of
the repair, what were the qualifications and cost of the renter vs. a
professional, etc.
I want to make sure this guy has more than just a civil decision
following him around in the form of the 1099 putting the IRS on his
ass.
Sounds like you have been to court, then. Whatever the ultimate
resolution of your case in that regard may be, it will probably be more
satisfying than trying to sic the IRS on this guy.

-Mark Bole
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

Barter or not barter? 11
USA Barter Transaction 9
Is Barter Taxable? 67
USA What happens when you barter with stock? 0
barter market place 0
USA Barter Income Question 0
Barter in QH&B ? 0
Calif. renter's credit vs. employer lodging 4

Top