Abandonment

An asset that you voluntarily scrap because of obsolescence, lack of suitability, or other reasons is considered an abandonment. If you abandon the asset before the end of its useful life, any basis that you have not depreciated becomes a loss that you can deduct in the current period. Insurance reimbursements or other proceeds reduce the amount of the loss and can result in a gain. By default, the system recognizes gains and losses on abandoned assets in all books.