World Coin Clinic – The Barter System
Bartering still thrives in the modern economy, from private exchanges to organized barter networks in the U.S. and global trade deals. Learn how these systems work, their legalities, and what the IRS requires—plus insights for new coin collectors on starting a collection wisely.
Is there a place where barter rather than a monetized economic system exists?
A direct trade of goods to get services is still practiced even in the United States. Iran and China are considering bartering oil for other goods. When bartering is practiced privately between two parties, no one else is aware of the transaction. There are organizations in the United States through which you can barter.
Are the barter organizations in the United States legal, and can anyone participate?
The organizations are legal and report transactions to the IRS for tax purposes. Among these groups are Craigslist.org, BizX.com, GoSwap.org, Listia.com, and BarterNetworkInc.com. Understand none of these networks are attempting to skirt taxes but are a substitute for monetizing financial transactions.
What does the IRS require if I practice using barter rather than cash?
I’m not certain you could completely go away from monetized transactions, but for those barter transactions that you make, you are required to file a Form 1099-MISC, “Miscellaneous Information.” Barter exchanges must file Form 1099-B, “Proceeds from Broker and Barter Exchange Transactions.” You must include gross income in the year of receipt the fair market value of goods or services received from bartering. Such income can be listed on Schedule C (Form 1040), “Profit or Loss from Business.”
I’m new to coin collecting. Should I try to complete a date series, or should I just buy rare coins?
There is no right or wrong answer. Collect what pleases you most. You can collect a date series from circulation. Should you decide to pursue what you call “rare” coins, consider it will take money and knowledge to succeed. You may want to start slowly and conservatively, then move on to greater challenges after you’ve made your mistakes at only a modest expense.
How will I know I made mistakes when I start buying rare coins?
You are putting significant sums forward when you purchase rare coins. There are plenty of scarce and desirable coins in circulation that can be collected at face value. Once you have paid a premium to acquire something rare, you won’t know if it was a good buy until you resell it. Walk before you run when you begin your quest for rarities.
Do rare coins always go up in value?
Supply and demand dictate the value of all coins, just as with anything else. There are truly rare coins known from just a few examples that are valued at a modest price due to a lack of demand. This is true, especially of some, not all, foreign and ancient coins. U.S. coins tend to be in stronger demand, so a truly rare coin known from just a few examples is likely, but not guaranteed, to command a strong price when it is resold. As with any other market, demand may occasionally slump.
You may also like:
