Determining Gain or Loss

• A business should determine the gain or loss that has been derived from a depreciated asset. This can be done by keeping a record of the amount of money that was used to buy it and the value derived from it. If it is a vehicle that has been used to transport goods to the markets, the derived value can be determined by adding all the money that would have been used to hire a vehicle to do the work. Determining gain or loss can give a company a good idea of the best time to sell the depreciated asset.
  
  

Tax Deduction

• The Internal Revenue Service offers tax deductions on the sale of depreciated assets. Depreciation deduction rules change from year to year, and businesses should check with the IRS to find out the current rules. In some years, the IRS offers accelerated depreciation to certain assets, which allows businesses to claim tax deductions on depreciated assets much faster.
  
  

Selling Depreciation Assets to the Owner

• For limited liability companies, the owner and the assets of the business are separate entities. Because of this, the owner cannot automatically buy the depreciated assets of the business. The directors of the business must decide on the mode of the disposal of the property. The business owner should participate in bidding for the assets as per the established rules. The directors may even decide that none of the owners will buy the assets.
  
  

Common Disposal Methods

• When selling depreciated assets, companies seek to get maximum gain from the sale. They achieve this by using disposal methods that attract market value bids. Some companies set a fixed price for the assets and sell them to the buyer who comes first. Others invite bids and sell the assets to the person who offers the highest price. Other companies may sell the assets to the business owners or employees at a set price.