A nonmonetary transaction is a type of economic transaction that does not involve the exchange of money. Nonmonetary transactions can involve the exchange of goods and services, as well as the transfer of ownership rights.
It’s important to note that if a nonmonetary transaction has commercial substance, it means that the transaction is treated like an ordinary commercial sale where gains and losses are recognized.
The gain on a nonmonetary transaction that has commercial substance is calculated as the difference between the fair market value of the goods or services exchanged and the taxpayer’s adjusted basis in those goods or services.