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Trade Dollars with other startups. Book it as revenue

revswap.ai

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Re: Trade Dollars with other startups. Book it as revenue

#71

Post by gizmo686 »

bombcar wrote: post #64
ahtihn wrote: post #58

Earlier quoted context omitted.

> You also have to pay taxes on that $5000 like other revenue. Businesses do not pay taxes on revenue, they pay taxes on profit. Other taxes may be applicable though (such as VAT or sales taxes).

If I spent $5k as a business to realize $5k in revenue the tax is zero (ignoring as you say sales VAT, etc) The problem comes when the $5k you “traded” also didn’t cover the actual expense to provide the $5k you “earned” - now you have an actual loss even if cash didn’t flow.

I could imagine somewhere trying to make that the rule, but I have a hard time imagining that rule being enforceable.

At least for US federal taxes, losses do not need to be tied to revenue. As long as they occur in the same tax year, you can deduct. You can also carryover losses to future years, or pass them through to personal income deductions; but the rules there get more complicated.

Re: Trade Dollars with other startups. Book it as revenue

#72

Post by mcmcmc »

outside1234 wrote: post #60
PeterStuer wrote: post #51

It's weird to keep referring to these AI behemoths as "startups".

They have no scalable business model that yields profit outside of raising more investment, so yes, somehow they are still startups

> They have no scalable business model that yields profit outside of raising more investment

Yeah that doesn’t sound Ponzi-adjacent at all

Re: Trade Dollars with other startups. Book it as revenue

#74

Post by Fordec »

Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

Doesn't feel very far off from the money circularly trading hands between Nvidia, Oracle, OpenAI etc.

Re: Trade Dollars with other startups. Book it as revenue

#75

Post by kjkjadksj »

Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

How do employees get paid here?

Re: Trade Dollars with other startups. Book it as revenue

#76

Post by joenot443 »

atomicnumber3 wrote: post #45
Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

This feels very adjacent to the story about the whole town in debt, and the rich guy leaves a $100 bill on the table, [and so on], in a way that I can't quite put my finger on.

It's a cool little analogy, one I'd never heard of before

https://www.econlib.org/archives/2012/01/an_answer_to_a.html

> True, at the beginning each resident has a $100 liability. But each also has an offsetting financial asset of $100. At the end, they all have neither. So the $100 bill acts as a clearing mechanism

Re: Trade Dollars with other startups. Book it as revenue

#77

Post by retr0rocket »

bryanlarsen wrote: post #69
Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

> The part that makes it not fraud is that both parties do actually do the work. It's far more nuanced than that. If you do the work but undervalue it, it's likely tax fraud. If you do the work but overvalue it, it's likely investor fraud. Even if you fairly value the work it still might be investor fraud. The vendor may have been chosen not by merit, but by its willingness to accept an exchange of services. Saying y…

[dead]

Re: Trade Dollars with other startups. Book it as revenue

#80

Post by oliver236 »

Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

and you dont need to pay taxes? how does that work
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