iirc it is based on whatever the irc considers fair market value for the service. I couldn't find the spot on irs.gov where I read that in the past but there is

iirc it is based on whatever the irc considers fair market value for the service. I couldn't find the spot on irs.gov where I read that in the past but there is this link that gives an example and mentions FMV http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Barter-Exchanges http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employ... edit actually the info is in the first paragraph of that other tc420 link.