The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
October 19, 1999
In this week's report. . .
Program Offers Corporate America
First International Bank, headquartered in Hartford (CT), has entered into a strategic alliance with the world's largest corporate barter company, Active International located in Pearl River (NY). Active has offices in 12 countries, and counts many of the world's largest manufacturers as clients.
As a result of the alliance, First International Bank will allow many of Active's clients to monetize their trade credits, prior to utilizing them to acquire media, goods and services.
Alan Elkin, CEO of Active, explained, "Our track record for performance in trade credit usage has given First International Bank the confidence to bring liquidity to the transaction." Elkin says under this program, Active may also issue trade credits, which can be monetized, to match unusable trade credits from other trading companies.
Brett Silvers, chairman and CEO of First International Bank, called the alliance noteworthy in that it brings together two companies known for their focus on providing financial services to manufacturing and distribution companies.
"We are both experienced in utilizing creative solutions to solve common problems in industry, such as excess capacity and inventory," Silvers declared. "Our methods for monetizing trade credits for qualifying companies will be a driving force for success and change in the $9 billion barter industry."
First International Bank specializes in Financing Manufacturers Worldwide®. Founded in 1955, it is the nation's largest combined user of loan guarantee programs made available by the Export-Import Bank of the U.S., the U.S. Small Business Administration, and the U.S. Department of Agriculture.
The bank has offices in 11 Northeast, Mid-Atlantic and Midwest cities and representatives in 13 international markets. First International Bancorp is the parent company of First International Bank.
Airline & Ocean Freight Carriers
Collaborative Logistics Exchange (CLE), a web-based freight exchange system will enable shippers, carriers and forwarders to easily notify their trading partners of excess capacity. Thus creating a frictionless marketplace for spot bids, or real-time bartering of prices and service agreements.
CLE is designed to allow each trading partner to manage its own private trading partner communities. It enables a personalized trading exchange with its key suppliers and customers, to operate via the internet.
Report From BarterNews
All Barter Deposits Are Not Taxable Income
Every January, as required by law under TEFRA, all of the approximately 500 organized trade exchanges in the U.S. provide the IRS with statements showing the total amount of barter credits deposited into each and every member's account during the previous calendar year.
(Your trade exchange also provides this information to you in the form of 1099Bs, "Proceeds from Broker and Barter Transactions.")
However, some of these barter deposits may not be taxable income. And over the following weeks we will look at the five kinds of barter deposits which are sometimes improperly taxed. You may want to file this important information and show it to your own tax advisor to determine how to report your barter credit income.
A taxpayer is permitted under the law to give any other taxpayer up to $10,000 during a tax year, with no tax consequences of any kind to the donor or to the recipient.
But if a trade exchange member gives barter credits to another member (as a gift), the amount of the donation is posted in the account of the recipient. And there is no way for the barter company to recognize the tax nature of the deposited funds, any more than your bank can identify which of your cash deposits are taxable.
Barter In The Mainstream News
Here and There...
September 28th: Here's a parallel story to our Venture Frog Incubator Trade story... One of the hottest entrepreneurial-minded outfits around is eCompanies, a $130 million venture-capital firm and business incubator, begun by EarthLink Network founder Sky D. Dayton and former Walt Disney web honcho Jake Winebaum.
In exchange for at least half of the equity in your company, eCompanies lends office space, business contacts, and technology and financial advisers. They are looking for business-to-business and consumer-oriented e-commerce, not infrastructure oriented companies.
September 28th: Adauction.com, a clearinghouse for unsold advertising space, recently expanded from the $2 billion online ad market to the $200 billion off-line market, offering such outdoor spaces as buildings, buses, taxicabs, and stadiums.
Now Adauction is taking to the water! Last week the company announced it is auctioning off newly created ad space on a "billboard by the bay," a 40-foot by 80-foot rectangular sail hoisted on a barge in the San Francisco Bay.
October 5th: Charleston, South Carolina-based Cinnabar Enterprises (OTCBB: CINNE) reported a 214% gain in barteredtrade volume during the last 90 days. The company services more than 1,100 clients throughout the Southeastern part of the U.S.
Coming soon. . .
We welcome your comments, questions, and observations.
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