Understanding what barter means and how an exchange of products or
services is considered taxable is the very reason for my posting.

Let's assume the following true statments:

1. My father owns a construction company and agrees to have his crew
over to my house and do a bunch of work...work that he would probably
be able to charge between $4,000 and $5,000 to someone else.

2. I own a professional web development company and agree to create a
website for my dad...work that I would probably be able to charge
between $4,000 and $5,000 to someone else.

My questions:

a. Does the above scenario represent a barter relationship between
myself and my father?

b. Do I have to pay taxes on the $4,000 to $5,000 that I received from
him?

c. Does he have to pay taxes on the $4,000 to $5,000 that he received
from me?

Yes on all fronts.

If the answer to any question a, b, or c above is "yes", does it
change if:

1. My dad simply agreed to do the work on my house in exchange for a
hug from his loving son.

2. I simply agreed to do the work for my dad in exchange for a hug
from my loving father.

No on both fronts.  Substance trumps the story you gin up to try to get
around tax law.

--
Phil Marti
Clarksburg, MD