Salvage Value

The salvage value of an asset is the value it's expected to have when it's no longer useful. In other words, the salvage value is the amount for which you could sell the asset at the end of its useful life.

Straight-line, sum-of-the-years'-digits, and custom depreciation methods require that you subtract the salvage value from an asset's acquired value to determine its depreciable basis. Other methods (such as declining-balance) and vintage account property do not subtract the salvage value to determine the basis but will not depreciate an asset below its salvage value. ACRS and MACRS depreciation methods ignore salvage value in determining the depreciable basis and will depreciate an asset below its salvage value.