[brianp-beme]

Originally Posted by BobC

The IRS views a trade or barter of goods the same as a sale of goods for cash, they're all considered taxable transactions. You may have been thinking about the old Section 1031 of the Internal Revenue Code, and transactions known as Like-Kind Exchanges. You used to be able to defer paying taxes on such Like-Kind Exchanges for pretty much anything, as long as the items being traded truly were of a like-kind. However, the Republican's 2017 Tax Cuts and Jobs Act cut back on what assets can qualify for the tax-free exchange treatment. Since 2018, the only assets you can exchange and defer the tax on are for Like-Kind Exchanges of real property (ie: land and buildings), and that is it. When you trade cards with someone, you are technically selling your card(s) for whatever the then current FMV is of the card(s) you receive in return, plus any cash they may be paying you as well. The trick is to somehow determine and then document what the then current fair market value is of each party's cards that are included in the trade, so each party knows what to report as having technically sold their card(s) for, and to also back their numbers up if the IRS ever comes knocking and asking questions.

Just think of what revenue the IRS could have pulled in if this had been in effect in decades past when kids were swapping cards with their friends.

Brian