I dug up a relevant article on the tax implications of barter for Canada this morning. We’ve published many here about the tax implications inside the United States, and I had heard from some Canadian exchange owners how the Canadian Revenue Agency handles barter and taxes, but this is the first published article I have found on the subject. Simply put,
CRA’s view is that “barter transactions are within the purview of the Income Tax Act.”
The CRA does not require barter exchanges to provide documentation like the IRS does, but business owners in Canada are still required to document and report their barter and trade transactions.
See the full article at http://www.theglobeandmail.com/globe-investor/investment-ideas/even-barter-transactions-have-a-tax-implication/article1472218/
How does this work for a trade-up experiment? I’m sure you’ve heard of Kyle Macdonald, the guy from Montreal that, through a series of 14 trades, traded his way up to a house from a paperclip. Recently, I have started the same type of experiment, but will be selling the final items for cash and giving a percentage to the first 10 traders. For some reason, I started thinking not only about the utilities and land tax if through my trades a house were obtained, but now I am concerned about the government taking a large portion of the money for themselves. If I start with a penny and end up with a house that I sell for $100,000….what would I have to end up paying to the government for my hard work of getting to that point? Like everybody else that has tried this, I would like to see a financial gain of enough money through my hard work of trading to pay off all of my debts, but at the same time, still give a little to the traders that helped me get that far. I’m not great with understanding taxes (like most Canadians) and just want to make sure I don’t get screwed in the end. I would really appreciate your honest opinion and look forward to a response. Thanks