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If I could go and buy something for 10 from the store and pay taxes on it then go right to the scrapyard and make 100 I would gladly pay taxes on it and do that all day. My example was something like a law mower. Pay a couple hundred brand new then scrap it for 5 I would not feel like you would have to pay taxes on that scrap money.
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gotcha! right.. thats not a capital gain. thats obvious asset depreciation. i dont think you'll run into trouble with that.
but i still will not tell you to declare scrap income or not. thats an attorney's job.
