An example of a barter arrangement would be when an individual builds a fence for a cattle farmer in exchange for food raised by the farmer. Instead of the farmer paying the fence builder $1,000 in cash for labor and materials, the farmer could give the builder a similar value in beef or corn in exchange for the fence. Virtually any good or service can be bartered if the parties involved agree to the terms of the trade. For tax purposes, barter arrangements are the same as cash payments. The Internal Revenue Service (IRS) considers the value of barter arrangements taxable income.