Barter Dollars
- Thread starter Frizzle
- Start date
I was involved in Bartercard for a few years in the city,Could someone please explain to me in layman's terms how Barter Dollars work? How might someone (a developer) who is selling a block of land benefit from accepting an offer of Bater Dollars from the buyer?
Frizzle
I can explain how it all works,bit hard via typing
I will PM my phone no if you want to chat.
I was involved in Bartercard for a few years in the city,
I can explain how it all works,bit hard via typing
I will PM my phone no if you want to chat.
Thank you, Pa1nter. Shall try to give a call as soon as I am able.
Frizzle
I was involved in Bartercard for a few years in the city,
I can explain how it all works,bit hard via typing
I will PM my phone no if you want to chat.
on the whole, a good or bad experience?
For myself it was a good experience and if you get the barter dollars easy enough,it worked well.It also helped we were living in the city and were able to spend our dollars wisely,when I moved to the country I found it harder to spend the dollars.
If you have a product that earns good money for little input, it is good otherwise it can bankrupt a small business quickly
search barter dollars and you will understand how they are used I call them fuzzy dollars as theirs is about 5 different types but the work the same way.
then can be used to great effect in a climbing market a bit of a problem in a flat or falling market
they are seen as 1 fuzzy dolar is the same as 1 real dollar to ato
and the fuzzy dollar dealers charge there commission and costs in real dollars
they don't accept there own currency
there is a real market for trading them
the only one that is across country boarder is empire and thats in the us and aust
the cost of running the fuzzy dollars is about teh same as if you accept cash so they have their limitations
where they work well is when you trade and then trade back to teh same person
but thats not for a board
they are systems that use these fuzzy dollars and no they are not illegal in anyway they are not for a board
then can be used to great effect in a climbing market a bit of a problem in a flat or falling market
they are seen as 1 fuzzy dolar is the same as 1 real dollar to ato
and the fuzzy dollar dealers charge there commission and costs in real dollars
they don't accept there own currency
there is a real market for trading them
the only one that is across country boarder is empire and thats in the us and aust
the cost of running the fuzzy dollars is about teh same as if you accept cash so they have their limitations
where they work well is when you trade and then trade back to teh same person
but thats not for a board
they are systems that use these fuzzy dollars and no they are not illegal in anyway they are not for a board
Using barter dollars
have a read of article
http://www.smh.com.au/news/business...no-one-laughing/2007/03/23/1174597885977.html
you might reconsider dealing in barter dollars!!
have a read of article
http://www.smh.com.au/news/business...no-one-laughing/2007/03/23/1174597885977.html
you might reconsider dealing in barter dollars!!
Yes Credex,but if you read down,you will see they also talk about Bartercard as being OK and been operating for 16 years and going strong.
Big difference in the two
Bartercard Reality How It Works Link
The link above shows a simplified scenario of the benefits of selling/buying land or property with a trade component between two members of a trade exchange.
The link above shows a simplified scenario of the benefits of selling/buying land or property with a trade component between two members of a trade exchange.
This is something I have looked at over the years for both property and business.
I have also spoken to some savvy accountants.... who were not much help with them.
I think the main problem I can see accepting them in business is the ATO sees it a 1:1 ratio for a normal dollar.
So If I buy a wiget for $100, sell for $1000 trade dollars, that is fantasitic.... I am making trade dollars at a 10:1 ratio. Or is it?
That will then give me a $900 taxable income so say at 30% I have to pay approx $300 worth of tax from REAL MONEY.....
So essentially, that $1000 trade money has cost $400 real money ($100 widget + $300 tax).... that means earning at a 2.5:1 ratio. I did a spreadsheet a while ago which playing different ratios of generating trade dollars from say 3:1 > 20:1 still had this problem and the REAL NET cost of the trade vaired from about 1.8 > 3. The only way to improve the NET cost of trade dollars was to increase the percentage of real cash (eg 50% cash, 50% trade).... but this then defeats the purpose of using it.
But then the other problem is the purchasing power of trade is not generally 1:1.
If anyone can advise how to overcome this issue I would be very grateful....
===========================
Now for the +ves of the ATO treating them 1:1 for real dollars.... let say someone have $10,000 trade dollars that they want to sell for $1,000.
How would the ATO treat that? Can you use as $9000 capital loss? Would it have no effect on the ATO?
Apart from the issue of what would happen in a situation like that... lets just say I now have $10,000 trade dollars. I really hate cancer, so lets say I donated $10,000 trade dollars to the cancer council, does that then mean I can claim a $10,000 REAL deduction from tax return? (approx $3,000 of value)
I have soo many questions and possibilities about trade dollars.... but just can't find out any good answers so any feedback is welcome.
I have also spoken to some savvy accountants.... who were not much help with them.
I think the main problem I can see accepting them in business is the ATO sees it a 1:1 ratio for a normal dollar.
So If I buy a wiget for $100, sell for $1000 trade dollars, that is fantasitic.... I am making trade dollars at a 10:1 ratio. Or is it?
That will then give me a $900 taxable income so say at 30% I have to pay approx $300 worth of tax from REAL MONEY.....
So essentially, that $1000 trade money has cost $400 real money ($100 widget + $300 tax).... that means earning at a 2.5:1 ratio. I did a spreadsheet a while ago which playing different ratios of generating trade dollars from say 3:1 > 20:1 still had this problem and the REAL NET cost of the trade vaired from about 1.8 > 3. The only way to improve the NET cost of trade dollars was to increase the percentage of real cash (eg 50% cash, 50% trade).... but this then defeats the purpose of using it.
But then the other problem is the purchasing power of trade is not generally 1:1.
If anyone can advise how to overcome this issue I would be very grateful....
===========================
Now for the +ves of the ATO treating them 1:1 for real dollars.... let say someone have $10,000 trade dollars that they want to sell for $1,000.
How would the ATO treat that? Can you use as $9000 capital loss? Would it have no effect on the ATO?
Apart from the issue of what would happen in a situation like that... lets just say I now have $10,000 trade dollars. I really hate cancer, so lets say I donated $10,000 trade dollars to the cancer council, does that then mean I can claim a $10,000 REAL deduction from tax return? (approx $3,000 of value)
I have soo many questions and possibilities about trade dollars.... but just can't find out any good answers so any feedback is welcome.
Been there done that what Painter said.
@ Welcome, yes barter $ are the same as legal tender $ for taxation purposes.
@ Welcome, yes barter $ are the same as legal tender $ for taxation purposes.
What is the tax treatment of bartering transactions?
Welcome and Piston: What do you guys think about the above link from the ATO that highlights the treatment of inflated barter transactions by using an arms-length/commercial price for the purposes of determining GST collected? The ATO article goes on to warn members of the trade exchange that it works both ways, warning that inflated purchases used to create large GST deductions could be seen as fraudulent.
If I was involved in large barter transactions I would definately get a Private Ruling from the ATO and good advice from a barter savvy accountant.
Welcome and Piston: What do you guys think about the above link from the ATO that highlights the treatment of inflated barter transactions by using an arms-length/commercial price for the purposes of determining GST collected? The ATO article goes on to warn members of the trade exchange that it works both ways, warning that inflated purchases used to create large GST deductions could be seen as fraudulent.
If I was involved in large barter transactions I would definately get a Private Ruling from the ATO and good advice from a barter savvy accountant.
very interesting. After researching this quite a bit over the past couple of months there are some huge benefits that can result from operating in bartercard and bbx type exchanges e.g. sell a difficult CGT asset and contribute the same amount in trade dollars to charity in order to get a revenue deduction, or contribute to an SMSF, or just buy any old sort of marketing/promotional materials for your business. I also understand it can be a quick way to alleviate a division 7A issue.
