Write Off vs Write Down

If you have some assets which have become too old, or are past their best, you may decide to do a write down of the asset on your taxes. A write-down is similar to a write-off, but where you completely nullify the value of the asset in the latter method, with a write-off you can carry on claiming some tax deductibles while reducing the amount of tax you have to pay on the value of the asset. If you are considering whether to write off your stock losses, or write them down, you will need to understand what both phrases mean.

Writing Off the Asset

If you write off your assets, you will effectively be throwing them away. You will be telling the IRS that the asset is no longer valuable in any from. This can be true if you have galloping losses on your stocks, but it may be the case that you are too eager to discard something which is no longer performing well.

Write Down the Asset

In order to write down the asset, you should reduce the estimated value of the item. This is usually done because the asset is over-graded, and is no longer sell-able at the higher price. The asset is written down to sell it off.