Definition of Income and Expenses
A sole proprietor reports the income and expenses from his business on a Schedule C, Profit or Loss from Business. Gross receipts are the total amounts of business income, including money, property, and services the organization received from all sources during the year, without subtracting any costs or expenses. Business income can be in the form of cash, checks, credit card charges, or even in the form of property or services received.
Bartering for property or services – Bartering is an exchange of property or services. Taxpayers must include the FMV of property or services received from bartering in his gross receipts. If the services were exchanged and both parties have agreed ahead of time on the value of the services, that value will be considered as the FMV of the services, unless the value can be shown otherwise.