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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

#141

Post by Arodex »

stephen_cagle wrote: post #100
gaiagraphia wrote: post #43

Earlier quoted context omitted.

VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste. If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste. The amount of labour wasted on moving numbers around numbers is staggering. edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a…

I've multiple times done a minor dive into why a VAT tax is seen as a reasonable tax? It... seems as regressive as a sales tax with even more layers of intervention? I've always eventually lost interest in trying to make sense of it, but they sure seem popular in Europe so there must be something to them? My current belief is that there should really just be a wealth tax on assets (Federal) and a land value tax on la…

It is a progressive tax. It is purely neutral when considered as a sales tax (same percentage, whether you buy a cheap loaf of bread or a luxury gizmo), regressive as a share of income when you consider the poor expend more of their revenue into daily expenditures (whereas the rich put a greater proportion into savings), but back to neutral when you consider savings are meant to be used one day anyway, and slightly progressive in countries where VAT is lower for food and other vital daily expenditures.

https://taxfoundation.org/blog/value-added-tax-vat-progressi...

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

#142

Post by Flundstrom2 »

stephen_cagle wrote: post #100
gaiagraphia wrote: post #43

Earlier quoted context omitted.

VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste. If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste. The amount of labour wasted on moving numbers around numbers is staggering. edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a…

I've multiple times done a minor dive into why a VAT tax is seen as a reasonable tax? It... seems as regressive as a sales tax with even more layers of intervention? I've always eventually lost interest in trying to make sense of it, but they sure seem popular in Europe so there must be something to them? My current belief is that there should really just be a wealth tax on assets (Federal) and a land value tax on la…

There used to be a wealth tax and land value tax in Sweden (aka world champion of taxation), but they were abolished simply because being taxed yearly on an fixed asset doesn't mean you have the liquidity to pay the taxes from your income. They had also caused the some of the wealthiest people in the UK to be Swedes, IKEA being Swiss and Dutch, and a lot of other movements of capital to other countries. All in all, wealth and value tax are a big loss of income for the government.

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

#143

Post by bryanlarsen »

singleshot_ wrote: post #122
mannanj wrote: post #89

Earlier quoted context omitted.

And who chooses how to value unique, innovative and visionary work?

Article 1 judges in US Tax Court?

And the judges are likely to be looking for good faith as much or more than technical accuracy in the valuation. So the IRS is not going to bring you in front of the tax judge unless they have evidence of bad faith.

OTOH, most work is not "unique, innovative and visionary" and has a relatively transparent fair market value.

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

#144

Post by danielmarkbruce »

scarby2 wrote: post #88
bryanlarsen wrote: post #69

Earlier quoted context omitted.

> 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…

This isn't a good take. > If you do the work but undervalue it, it's likely tax fraud. A company can value it's services as it chooses. If the work is performed for $1 or $5000 the government doesn't get a say in that. > you do the work but overvalue it, it's likely investor fraud. Quite possibly. Assuming this was done with the intention of misrepresenting your revenue and gaining investment. >The vendor may have be…

This is pure nonsense. In the US the internal revenue code doesn't allow you to just value services however you choose in what is effectively a barter arrangement.

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

#145

Post by danielmarkbruce »

scarby2 wrote: post #114
bloppe wrote: post #102

Earlier quoted context omitted.

> If the work is performed for $1 or $5000 the government doesn't get a say in that What if you're getting paid in landscaping?

On a corporate level it doesn't really matter as you're only taxed on your profits/losses. If we do a service swap ultimately it's just adding a revenue item with a matching loss, and these are infact quantified. As an individual interestingly it does matter because services received for free are considered taxable income (but businesses are not taxed on their income).

You are just making stuff up, this isn't remotely close to how tax law works.

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

#146

Post by c7b »

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…

Re taxes: Barter exchanges are considered taxable revenue by the IRS and must be reported on a 1099-B form. [0]

[0] https://en.wikipedia.org/wiki/Barter

Re investors: please list at least one credible source supporting this assertion.

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

#147

Post by bryanlarsen »

c7b wrote: post #146
bryanlarsen wrote: post #69

Earlier quoted context omitted.

> 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…

Re taxes: Barter exchanges are considered taxable revenue by the IRS and must be reported on a 1099-B form. [0] [0] https://en.wikipedia.org/wiki/Barter Re investors: please list at least one credible source supporting this assertion.

https://www.law.cornell.edu/wex/securities_act_of_1933

Any lie, misleading omission or misleading half-truth is investor fraud.

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

#148

Post by [deleted] »

tstenner wrote: post #135
thih9 wrote: post #134

Earlier quoted context omitted.

Note that we’re talking about two companies exchanging services. When two companies undervalue the services that they offer to each other, they pay lower taxes. This is the illegal part.

If the expense is tax deductable, it mostly doesn't matter whether you have $10 earnings vs $10 business expenses or $10K.

[deleted]

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

#149

Post by thih9 »

tstenner wrote: post #135
thih9 wrote: post #134

Earlier quoted context omitted.

Note that we’re talking about two companies exchanging services. When two companies undervalue the services that they offer to each other, they pay lower taxes. This is the illegal part.

If the expense is tax deductable, it mostly doesn't matter whether you have $10 earnings vs $10 business expenses or $10K.

Good luck explaining that to the IRS.

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

#150

Post by [deleted] »

andix wrote: post #136
thih9 wrote: post #131

Earlier quoted context omitted.

> Probably not, it's just giving a discount. Nothing wrong with that. Discounting and undervaluing have differences, one of them is transparency. As you say, many companies offer discounts and don’t hide that. People who commit tax fraud usually aren’t transparent about their “discounts”.

Discounts are often not transparent. Have you ever seen a SaaS that lists "Enterprise pricing: contact us"? It's basically saying they give you as much discount as you need to be able to afford the service. And those discounts are very secret by design.

[deleted]
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