Several snips:
>The other issue is whether you can sell written off stocks. The tax
authorities
>don't take kindly to giving tax allowances for writing down, followed by
>seeing income for those same stocks. It means that you have to sell them
>dirt cheap, at which point the skip becomes more economic.
>Unfortunately, the stock market and the western tax regime make it more than
>likely to happen again. My company has just had to do the same thing with
>spare parts for machinery we no longer use.
Can we all please stop trying to be tax experts here? The above statements
are inaccurate (at best). You will ALWAYS have more money in your pocket
AFTER TAX by selling something rather than by throwing it away.
ALWAYS.
1000f the time.
>From an economic perspective, there is no reason whatsoever to throw
something away. There may be valid business reasons, but there are no
strictly financial/tax reasons.
By the way, there are limitations for tax deductions on "writing down"
inventory here in the US. Without going into specifics, you can generally
only write down inventory to a value that you have offered to sell it at
within 30 days, and NEVER below scrap value. Therefore, you can write it
down only if you can prove you can only sell it at that (lower) price.
Before you argue with me, read IRS Reg. 1.471-2(c). I do this for a living
and deal with it every month, so it bothers me to constantly see people
spread nonsense about "throwing old inventory away for tax reasons."
Steve Troy (CPA, MBA)
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