According to this question, a 0% loan may not be legally considered a 'loan', but a 'gift', which is taxable.
When attempting to research it I came across this; According to the IRS: You are required to pay taxes on "the fair market value of goods or services received from bartering", however businesses are allowed to deduct "certain costs you incur to perform services that you barter."
This raised several scenarios/questions in my mind, that are all related to the original question.
If you trade for something of equal value, is that considered income? It seems like the answer is yes. The IRS says you must pay taxes on the 'value of goods or services received', not on the net value. So if you and a friend decide to swap otherwise identical bicycles because you liked the other's color, are you both required to pay taxes on the value of the bicycle.
If you borrow a small amount of money for a short time, is that considered income? For example you left your wallet at the office while out at lunch so a friend loans you $10 to pay for lunch until you get back to the office where you can pay him back.
What about the previous scenario in reverse, does the friend have to pay taxes when they get back their $10?
Do you have to pay taxes if you are paid back in a different format than originally paid? For example, a coworker buys lunch and you pay them with something denominated in paypal/google wallet/etc. By the end of the year, this coworker may have hundreds of dollars in their account.
I know the logical answer to these is 'No' because no one is making money, so there's no net income. However my question exists because for all other income, you are required to pay taxes on the gross amount, regardless of how/what you spend it on (deductions notwithstanding), and way the IRS describes barter makes it sound like you are required to pay taxes on the gross value of what you received, not the net value.
Thank you for reading.