Can I claim a terminal loss if the assets sell for less than their remaining tax value?

Potentially, yes. When depreciable property is sold for less than its remaining undepreciated tax value, and that sale leaves no other assets remaining in the same depreciation class, the shortfall can generally be claimed as a terminal loss — a deduction against income, not merely a capital loss restricted to offsetting capital gains. This is the mirror image of recapture, which arises when depreciable property sells for more than its remaining tax value.

The key condition is that the class actually needs to be empty after the disposition; if other assets remain in the same class, the loss on the disposed asset doesn't necessarily crystallize as an immediate terminal loss and instead continues to work through as the class's balance goes forward. In a business sale involving multiple pieces of equipment across different classes, this needs to be worked through class by class, not assumed for the sale as a whole.

Because terminal losses and recapture both depend on precisely how assets are grouped into classes and what their tax values actually are, this calculation should be done by an accountant reviewing the corporation's actual depreciation schedule before the deal closes, so it can also inform how the purchase price gets allocated.