Question: Does bartering for goods or services create income?
Answer: Yes. Bartering for goods or services creates income to the extent of the fair value of the item received.
For example, let’s say an auto mechanic exchanges some auto repair work for free rent of an apartment. If the apartment rental value was $800, that is the amount the mechanic needs to report on his tax return as income for services rendered. The landlord would report the value of the auto repair he received (also $800) on his tax return as rental income.
