Writing off a capital asset

You can write off a capital asset when you have no further use for it. For example, a piece of equipment is ready to scrap, a building is being torn down or you’re giving away a vehicle for free.

You’ll need to remove the asset from your books as you can no longer claim ownership. There are two ways to do this.

1. If the asset has been a part of the business for many years and can reasonably be assumed to be fully depreciated:  
2. If the asset was purchased fairly recently and isn’t fully depreciated:

The loss on the asset’s sale is the difference between the original cost of the asset and the total amount of depreciation that has occurred over its life. It can be used to offset any capital gains that have been claimed throughout the year. AgExpert Analyst doesn’t keep track of this number. Your accountant may have to help you calculate it accurately.

Last updated on July 2, 2013 by FCC AgExpert