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Wasting Asset

By Contributor on October 7, 2018

A wasting asset is an asset which losing it’s value over time due to depletion, obsolescence, deterioration, etc.

It does not necessarily refer to real estate as it is a term widely used to describe assets such as gas, oil, minerals underground, or even timber on land.

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Improvements made on land which includes a house or building built on it are wasting assets.

However in this scenario, the land is not a wasting asset by definition as it will continue to hold value long into the future.

There are income tax depletion deductions that owners of wasting assets could be eligible for.

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So it you have them in possession, do check with a qualified accountant when doing tax planning.