expected price for a fixed asset no longer needed in business operations; also called scrap value. In determining depreciation expense, salvage value is deducted from cost (except when the double-declining-balance method of accelerated depreciation is used).
estimated value of a property when the taxpayer completes his use of the property. In determining the amount of depreciation allowable, salvage value must be subtracted from basis. Salvage value is ignored by the MACRS and ACRS rules.
the estimated value that an asset will have at the end of its useful life.
Example: An appraiser estimates the useful life of a building at 40 years; she also estimates that the building's salvage value would be $10,000 in 40 years. Consequently, all but $10,000 of the building cost is to be depreciated over 40 years.
