The Bank of Happiness

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Estonia's Bank of Happiness: trading good deeds

On one level, it was just a haircut. Peeter, a middle-aged IT manager, entrusted his diminishing locks to Nele, a young craftswoman armed with goodwill and a pair of scissors. By all accounts, Peeter was delighted with his newly shorn pate. On another level, though, the clash of keratin against blades that took place in a Tallinn apartment last month was historic. For the cut was given free, with no exchange of cash or other payment, and is recorded as the first official transaction carried out by the Bank of Happiness in Estonia.

Unlike Eesti Pank (the Bank of Estonia) — a giant, gravel-coloured building that evokes the stern spirit of the Soviet Union — the Bank of Happiness has no carved wooden doors, imposing pillars or marble floors. Not a single Estonian kroon will sully its accounts, for it is a virtual bank that will trade purely on good deeds.

-snip-

http://women.timesonline.co.uk/tol/life_and_style/women/the_way_we_live/article6053885.ece

This is an excellent idea that could probably take hold in many US communities. I'm looking at the possibilities myself for my town.

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1. Shameless self-kick. Just one person found this interesting? n/t

[Suich]

2. What a great idea!

K & R!

[varelse]

3. Awesome

that's one idea I hope goes "viral" :)

“We call it a bank because we want to bring forth a new set of values”, says Tiina Urm, a 26-year-old who helped to think up the idea and is the closest thing that the Bank of Happiness has to a manager. “At the moment we are glued to other people only through money. But that’s not how we evolved as a society. We used to work as a team.”

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4. Kicking for the evening crowd. n/t

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5. Give this one more rec for Pete's sake. If GD isn't interested in this, perhaps

the rest of the board might be.

[girl gone mad]

6. Mike Shedlock covered this last week.

His take:

http://globaleconomicanalysis.blogspot.com/2009/04/bartering-services-to-combat-recession.html

In the US, the Bank of Happiness would likely get raided by the IRS. Participants would be subject to an official crackdown asking for back taxes and huge penalties.


To understand why, please see Internal Revenue Service guidelines on Topic 420 - Bartering Income.

Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of goods and services received in exchange for goods or services you provide must be included in income in the year received.

The Internet has provided a medium for new growth in the bartering exchange industry. This growth prompts the following reminder: Barter exchanges are required to file Form 1099-B for all transactions unless certain exceptions are met.

If you receive income from bartering, you may be required to make estimated tax payments. Refer to Publication 525, Taxable and Nontaxable Income, for additional information.

Bartering Services Required To Report Members

Please note that bartering services are required to report members as per IRS Tax Requirements for Barter Exchanges.

Under Regulation 1.6045-1(f)(i), barter exchanges are required to make a return of information reporting the name, address, and taxpayer identification number of each member or client providing property or services in the exchange, the property or services provided, the amount received by the member or client for such property or services, the date on which the exchange occurred and other information required on Form 1099-B. This means that multiple Forms 1099-B may be required for member clients with multiple bartering transactions during the year. To learn more about 1.6045-a(f)(i), Returns of Information of Broker and Barter Exchanges, visit the Electronic Code of Federal Regulations site, click on "Simple Search" and enter 26 in the Title and "Returns of information of brokers and barter exchanges." in the "Search for" field.

Penalty for Not Filing or Filing Incorrect Forms 1099-B

Failure to file Forms 1099-B can result in significant penalties under Internal Revenue Code Section 6721. The penalty is based on when correct information returns are filed. The penalties are:


• $15 per information return if filed correctly within 30 days of the specified due date with a maximum penalty of $75,000 per year ($25,000 for small businesses).
  
• $30 per information return if filed correctly more than 30 days after the due date, but by August 1 with a maximum penalty of $150,000 per year ($50,000 for small businesses).
  
• $50 per information return if filed after August 1, or not filed, with a maximum penalty of $250,000 per year ($100,000 for small businesses).
  
• A minimum of $100 for each unfiled information return for intentional disregard.

If you want to barter in the US, Uncle Sam wants to tax you on it. For private individuals to be subject to this sort of nonsense is of course ridiculous.

Be sure to talk to a good tax attorney if you're serious about starting a bartering service in your community.

[roguevalley]

7. very nice. :)