Why Are You Getting No Value From Your Old IT Assets?

The Financial Challenge of Getting Cash for Your Waste

Many of us have tried to navigate the ways in which you can get value for old assets. We have heard numerous stories about how frustrating it can be to see all of these old working assets being disposed of when they might still have value.  

What we know is that the account practices often get in the way. Why is that?

If an asset that has been fully depreciated to zero is sold, any proceeds from the sale would typically need to be declared for tax purposes. Here's why:

Capital Gain or Loss:   
When you sell an asset, the difference between the selling price and the asset's adjusted basis (which may be zero if fully depreciated) results in either a capital gain or a capital loss. If the selling price exceeds the adjusted basis, you have a capital gain. If the selling price is less than the adjusted basis, you have a capital loss.

Tax Implications:
Capital gains are generally taxable, while capital losses may be deductible against capital gains or ordinary income, subject to certain limitations and rules in your tax jurisdiction.

Reporting Requirements:
Depending on your tax jurisdiction and the nature of the asset, you may need to report the sale and any resulting gain or loss on your tax return. This typically involves completing specific forms or schedules provided by the tax authorities.

Documentation:
It's important to keep accurate records of the sale, including the selling price, the original cost basis of the asset, any depreciation taken over its useful life, and any expenses related to the sale (such as brokerage fees). This documentation will help you accurately calculate and report any capital gain or loss on your tax return.

In summary, even if an asset has been fully depreciated to zero before being sold, any profit from the sale is generally subject to tax and should be declared according to the tax laws in your jurisdiction. Many accounting teams struggle with this and often refuse accepting any profits. This means that e-waste company not only makes money from the cost they charge to you for disposing of the products they also make money from then on selling the products.

So what is the alternative? How can you make sure you try and get some form of value? Better still how can you make sure that you can get value and do your part for your sustainability initiatives?

Read more on our circular credits here:
ReCircular Credits