Community resilience
How to barter with the people around you
Bartering is trading what you have or can do for what someone else has or can do. It is a skill for good times and bad: an hour of tutoring for a brake job, a bag of tomatoes for a dozen eggs, a Saturday of babysitting for a Saturday off. This guide covers how to agree on value, what to keep off the table, and how the IRS treats barter income.
By Dan Whelan, founder of New World Survival
Researched from government agencies, university extension services, and other published sources. See our sources
What bartering is
Trading you already do
The IRS defines bartering in one line: “the trading of one product or service for another.”[2] No money changes hands, or very little. Each side gives something it has more of and gets something it needs.
Most households trade more than they realize. The Census Bureau and AmeriCorps estimate that 54.2% of Americans helped or exchanged favors with neighbors between September 2022 and September 2023.[1] A favor returned is a trade. Bartering on purpose just adds two habits: knowing what you can offer, and agreeing out loud on what each side gets.
That is why it is worth learning in an ordinary year. It stretches a tight budget, it puts skills to use that would otherwise sit idle, and it builds working relationships with the people nearby. Those same relationships are what a household leans on when times get harder. A neighbor you have traded with is a neighbor you already know how to deal with.
The everyday forms
- Skill swaps. You fix a leaky faucet; your neighbor does your taxes or teaches your child to read music.
- Garden surplus. Every gardener ends August with too much of something. Zucchini goes for berries, herbs for honey.
- Babysitting co-ops. A group of families trades hours of childcare, often tracked with tokens or a shared sheet.
- Time banks. Members of a time bank earn an hour of credit for each hour of help they give, and spend it on help from anyone else in the bank.
- Tool and clothing swaps. A ladder that is used twice a year can serve a whole street. Outgrown kids’ clothes rarely wear out first.
- Yard-sale haggling. Not barter in the strict sense, but the same skill: name a number, hear theirs, and meet somewhere both sides are glad of.
The core skill
Agreeing on what a trade is worth
Every good trade comes down to one conversation: what is this worth to each of us? People skip it because it feels awkward, and that is where most bad trades start. One side assumes an hour of tutoring equals an hour of plumbing. The other side was thinking of the plumber’s rate. Nobody says anything, and the next trade does not happen.
The fix is to say the numbers out loud, before anyone starts work. It takes about five minutes.
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Price both sides in dollars first
What would it cost to buy this item or hire this job? A quick look at local prices gives you a shared starting point that is not just opinion.
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Adjust for need
A dollar figure is where the conversation starts, not where it ends. Surplus you would otherwise compost is worth less to you than to someone who needs it. Say so. Both sides coming out ahead is the point.
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Name the terms
What exactly is each side giving, how much, and by when? “Help with the yard” is vague. “Three hours of raking on Saturday morning” is a trade.
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Write it down
A text message is enough: who, what, what it is worth, when. It prevents misunderstandings and it doubles as your tax record. IRS Publication 525 says that when two people exchange services and both agree ahead of time on the value, that value will be accepted as fair market value unless it can be shown to be otherwise.[4]
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Close the loop
When both sides have delivered, say so. “We’re square” ends the trade cleanly and leaves the door open for the next one.
Words for the awkward part
If naming a price feels uncomfortable, and for most people it does, try this: “A plumber would charge about $150 for that, and an hour of tutoring usually runs about $40. Would three sessions for the repair feel fair to you?” You have given your reasoning, made an offer, and asked a question. The other person can say yes, or name their own number, without anyone losing face.
Before your first trade
Three lists every household should keep
Sit down with the adults in the household for about 30 minutes and write three short lists. They make the first conversation easier because you already know what you can offer, and they keep the household from trading away something it needs.
What we can spare
Things you have more of than you use: garden surplus, baked goods, outgrown clothes, a second set of tools, books, firewood you split last fall, the camping gear that has not left the garage in three years.
Skills we can offer
What each person can do well enough that someone would pay for it: mending, small repairs, cooking, childcare, tutoring, sewing, bookkeeping, computer help, hauling with a truck, a second language. Skills do not run out when you trade them.
What we will not trade
Medicine, which stays with the person it is for. The food and water the household is counting on. Fuel. Anything your household plan depends on. Decide this list calmly now, so a persuasive offer on a hard day does not decide it for you.
The one rule
A trade should never leave your household less prepared than it was before. If it would, the answer is no, however good the offer sounds.
Getting started
Four low-stakes ways to make a first trade
Start small and close to home. The time estimates are ours, for a first try.
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Offer your surplus to one neighbor
Walk a bag of extra produce or a loaf of bread next door and say, “We had too much of this. If you ever have extra of something, we’d be glad to trade.” No negotiation needed for a first round. If you have not met the neighbors yet, the Four-Door Introduction has scripts for the first conversation.
Ten minutes
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Propose one skill swap
Pick one thing from your skills list and one thing you would otherwise pay for. Ask a friend or coworker who has the skill you need. Use the five steps above to agree on terms.
One conversation
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Host or join a swap
A clothing, book, or plant swap needs a driveway, a folding table, and a start and end time. Whatever is left goes to a donation center. Lending tools works the same way; for a more permanent setup, see the tool library guide.
An afternoon
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Start a small babysitting co-op
Three to five families, one shared sheet, and a simple rule: one hour given earns one hour received. Agree on ground rules at the start: who can drive the children, how far ahead to ask, and what happens when someone gets sick.
An evening to set up
If you would rather not knock on doors
Plenty of people find this hard. Start with someone you already deal with: a coworker, a friend from church or the gym, a fellow gardener. A trade between two people who already know each other is the easiest first step, and it counts just as much.
Good times and hard ones
Trading fairly, in any season
A few habits keep trades friendly and keep your household on solid ground.
- Trade small first. A first trade with someone new should be one you would not mind losing. Trust grows one completed trade at a time.
- Trade what you have, not what you bought to trade. Some advice tells people to buy extra goods now to trade later. That ties up money in things that may not be wanted, may spoil, or may never be needed. Your skills and your genuine surplus are the trade goods that hold their value.
- Only trade what is legal to give. Some things cannot lawfully be traded or need a license to sell. If you are not sure, leave it off the list.
- Stay within skills you actually have. Offer the repair you have done before, not the electrical or gas work that needs a licensed professional.
- Keep it about the trade. You do not need to tell anyone what else you have at home. Offer what is on your spare list and leave it there.
- Let a no be a no. A declined offer is not an insult. People who can say no comfortably are people you can trade with again.
When money is tight
Bartering earns its keep in a lean stretch: a job loss, a slow season, a long disruption. The households that trade well then are the ones that practiced in easier years. They already know their lists, their neighbors, and how to agree on a price without hard feelings. Cash still matters in those stretches, and our guide to money during a long disruption covers how much to keep and how to keep bills paid.
If you want the history of how whole communities have used barter when the cash economy faltered, our financial hardship guide tells it. For an organized group of neighbors helping each other, see mutual aid networks.
Barter and taxes
What the IRS actually says
A trade with no money involved can still be income. This section sums up the IRS’s own pages. It is general information, not tax advice.
The basic rule
IRS Tax Topic 420 says you must include in gross income, in the year you receive them, the fair market value of goods or services you receive from bartering.[3] Publication 525 says the same: the fair market value of what you receive in bartering counts as income at the time you receive it.[4] If you and the other person agreed on a value ahead of time, that agreed value will be accepted as fair market value unless it can be shown to be otherwise.[4]
Where it goes on a return
Bartering connected to a business generally goes on Schedule C. Otherwise, Topic 420 says to report it on Schedule 1 of Form 1040.[3] Publication 525’s examples include a self-employed accountant who trades services with a house painter and reports the value of the painting on Schedule C.[4]
Barter exchanges and credits
An organized barter exchange, where members contract with each other to trade, must generally file Form 1099-B for its members’ transactions.[3] If an exchange or club credits your account in trade units, Publication 525 says the value of the credits counts as income when they are added to your account, even if you spend them in a later year.[4]
Swaps between neighbors
Topic 420’s definition of a barter exchange leaves out “the informal exchange of similar services on a noncommercial basis,” and it gives a babysitting co-op as the example.[3] Read that carefully. It decides which organizations have to file Form 1099-B. It does not say those swaps are free of tax, and the IRS pages we checked do not separately address casual trades between neighbors.
What that means in practice
Keep the same simple record you used to agree on the trade: date, who, what each side gave, and the agreed value. If you trade as part of a business, or trade often or in larger amounts, talk with a tax professional or a free IRS-certified volunteer tax site before you file. Our federal tax basics guide explains how a return fits together.
Common questions
Bartering questions
Is bartering legal?
Yes. The IRS describes bartering simply as the trading of one product or service for another.[2] What you trade still has to be legal to own and give, and barter income can be taxable.
Do I have to pay taxes on bartering?
Barter can be taxable income. The IRS says the fair market value of goods or services you receive by bartering is included in gross income in the year you receive it.[3] The IRS pages do not separately address casual swaps between neighbors, so for anything beyond an occasional small trade, keep simple records and ask a tax professional.
Is a babysitting co-op taxable?
Topic 420 uses a babysitting co-op as its example of an informal exchange of similar services, and leaves such arrangements out of its definition of a barter exchange, which decides who files Form 1099-B.[3] The page does not say those swaps are exempt from income. If you have a question about your own situation, ask a tax professional.
How do you decide what a trade is worth?
Price both sides at what they would cost to buy or hire, adjust for what each side needs, and agree on terms before work starts. Write the agreed value down; Publication 525 says an agreed value between two people exchanging services is accepted as fair market value unless shown otherwise.[4]
What should you never trade?
Medicine, the food and water your household is counting on, and fuel. A trade should never leave your household less prepared than it was before.
Primary sources
Where this guide’s facts come from
Each source was opened and read on the date shown. The trading methods, scripts, and time estimates on this page are practical guidance, not research findings.
- U.S. Census Bureau, New U.S. Census Bureau and AmeriCorps Research Tracks Virtual Volunteering for First Time (November 19, 2024). Accessed November 8, 2026.
- Internal Revenue Service, Bartering Tax Center (web page). Accessed November 8, 2026.
- Internal Revenue Service, Topic No. 420, Bartering Income (last reviewed or updated October 8, 2026). Accessed November 8, 2026.
- Internal Revenue Service, Publication 525, Taxable and Nontaxable Income, Bartering (for 2025 returns). Accessed November 8, 2026.
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What’s next
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Faith communities
Build an Interfaith Disaster Network
A one-page charter, a shared capability list, and written agreements between congregations.