After-Tax Salvage Value Calculator

About this calculator

When a company disposes of an asset at the end of its useful life, the cash it actually keeps isn't the full salvage (resale) value — if the sale price exceeds the asset's remaining book value, that gain is taxable. The after-tax salvage value is salvage value − [tax rate × (salvage value − book value)], giving the true net cash the company pockets.

This figure is a required input in capital budgeting analyses like NPV and IRR, where it forms the terminal cash flow at the end of a project's life. Corporate finance analysts use it to avoid overstating a project's profitability by ignoring the tax owed on any gain over depreciated book value.