What Is an Even Trade Bill of Sale?
An even trade bill of sale records the exchange of goods or property of equal value between two parties. No money changes hands, since each person trades one item for another.
This type of bill of sale is common for trading vehicles, boats, electronics, or collectibles. It confirms that ownership changes hands right away and helps prevent issues about what was traded or the condition of each item. You might need an even trade bill of sale when:
- Updating a vehicle title or registration at the DMV
- Proving ownership after a trade involving valuable assets
Keep in mind that this document differs from a trade bill, which is a promise to pay later. An even trade bill of sale, on the other hand, documents a direct swap that happens right away.
Do You Need a Bill of Sale for a Trade?
You need a bill of sale for a trade if your state requires it for titled property, like vehicles or boats. Some states make it part of the official process to transfer ownership.
For example, in Missouri, an even trade bill of sale is required for any transfer handled through the DMV or Department of Revenue. In Texas, proof of trade is also needed when titling a vehicle. In both cases, the document confirms the swap and shows that ownership changed hands for good. Even if your state doesn’t require an even trade bill of sale, it’s still smart to have one. It helps by:
- Clearly stating what was traded and when
- Recording the condition of each item
- Serving as proof if questions come up later
For untitled items like tools or collectibles, an even trade bill of sale is optional but practical. It keeps things organized and makes it clear who owns what after the trade.
Taxes on Even Trades
Even trades can trigger tax obligations. The IRS treats them as bartering, so you’ll need to report what you receive as income. Here’s how it works:
- Report the fair market value of the item on Schedule C of (Form 1040) or Form 1099-MISC for private trades.
- Pay a transfer tax if your state charges one. For example, Texas charges a small transfer tax of $5 per vehicle.
Keeping track of these details helps you stay compliant with the IRS and state rules. It also prevents unexpected tax bills or penalties down the road.
How to Write a Bill of Sale for a Trade
If you’re trading property of equal value, take a few minutes to fill out an even trade bill of sale so both sides are covered. It’s quick to do and helps make the swap official.
- List both traders’ full names and contact details. In an even trade, each person is both the buyer and the seller, so include their full legal names, mailing addresses, and phone numbers.
- Describe both items being traded in detail. If you’re preparing a bill of sale for trading vehicles, include the VIN, make, model, year, color, and license plate number so the DMV can update the title without issues. For other property, such as a boat, ATV, or trailer, add details like the hull ID, serial number, or registration number.
- Note the condition of each item. State whether each is new, used, or in good, fair, or poor condition. This shows both parties accept the trade as-is and understand the state of what they’re receiving.
- State that no money changes hands. Make it clear this is a direct trade of equal value, not a sale, gift, or partial cash deal.
- Add warranty details if they apply. Include this only if an existing warranty or service contract transfers with one of the items. If not, note that both items are traded without warranties.
- Use the “Additional Details” section to confirm the agreement. State that both parties believe the items are of equal value and agree on who pays for registration or title transfer fees.
- Enter the exact trade date. This marks the moment ownership changes for both items and becomes part of the official record.
- Include a notary acknowledgment if required. Some states require notarization for trades involving titled property to make the document valid.
- Review, sign, and keep copies. Once the even trade bill of sale is complete, both parties should review it carefully, sign the document, and keep a copy for their records.
It’s tempting to skip an even trade bill of sale, but verbal agreements can easily lead to disagreements about value, condition, or ownership. Putting it in writing keeps things clear for both sides. You can also save time by using Legal Templates’ free even trade bill of sale template to make your trade official.
Depending on the trade, you might need a few extra forms to meet state requirements:
Even Trade Bill of Sale Sample
Take a look at our even trade bill of sale sample. It includes key details like item descriptions, conditions, and trade terms. Once you’re ready, download the free bill of sale even trade template in PDF or Word, fill it out, and make your trade official.
