Rundown Volkswagen Worth $200 Million?
One of the exciting things about the business world is the unpredictability of the future. Or more to the point, the fabulous possibilities that do occur for the dreamers and doers!
Such is the case for an orphaned boy who got into the pizza business in Lansing (MI) over 40 years ago.
To imagine what a meager beginning it was, consider that he acquired the final 50% ownership of his first pizza store in exchange for his rundown Volkswagen.
Years later it paid off, when in 1989 Tom Monaghan sold his 5,100-unit Domino’s Pizza chain for $400 million. If he had not taken action years earlier, bartering for the other 50% ownership, he would have received $200 million less at the closing.
Source: You Never know how far a trade will take you!
Tax Tips For Trade Members
Bartering can be great for your business when used for business related needs such as: payroll, printing, advertising, legal advice and client appreciation gifts. Bartering also has important tax saving advantages. Barter income is part of your businesses taxable gross income so you can lower your tax liability if you spend your barter income dollars for business purposes.
Barter income should be thought of as part of your total business working capital. To make your whole working capital cycle, which includes barter, operate effectively; you need to be creative and disciplined. You need to be willing to stop paying cash to people just because you have done business with them over a long period of time. Cash normally used for business expenses can be replaced by bartering. Either get them to trade or find someone who will trade with you.
Another way to use trade is to pay your employees in lieu of a cash wage increase with trade credits. If part of your revenue is trade credits, then part of your payroll should be paid in trade as well. It just makes good business sense.
To comply with the IRS, treat trade dollars the same as cash in recording income and expenses. If you use your trade credits wisely for business purposes, it will lower your tax liabilities, improve your cash flow, increase your productivity and net worth.
Reduce your taxable income by spending barter credits for business expenses—it’s that simple!
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