how is payment in kind taxed 
the internal revenue service considers bartered exchanges as income the fair market value of goods and services are often taxable as the recipient received a value even though the exchange was not made in cash the bottom linesome payment in kind arrangements call for periodic assessments of interest interest on these debt instruments may be made in cash or a company may be assessed additional debt equity or other non cash charges though payment in kind agreements favor a company not wanting to part with cash the company often faces a steeper interest expense through a higher interest rate when opting for the in kind payment option 