By Amy E. Feldman
PHILADELPHIA (CBS) – How do you get goods without paying a dime (legally)?
The American Bar Association Journal reports that lawyers with cash-strapped clients are taking payment in kind, rather than in cash.
One lawyer agreed to take a client’s Rolls Royce rather than cash (who wouldn’t?). Another, whose client was accused of dealing in illegal firearms, was offered a US Army tank – but didn’t take the case or the tank.
Barter is one of the most ancient forms of commerce: You paint pictures on my cave dwelling; I will give you the meat I hunted while you were painting. The question remains: is it legal?
The idea of bartering is not only legal, it’s actually logical. Cash strapped businesses receive the goods they need by exchanging them for products or services they sell rather than paying cash. And from babysitting services to the sale of computers, the value of products and services bartered is estimated to be more than $8 billion.
But just because cash doesn’t change hands doesn’t mean Uncle Sam doesn’t get a cut. Under the law, you must report as income the fair market value of the property or services you receive because as you know, Uncle Sam has some big guns to use against your bartered tank.