4.26 Ark. Code R. 51-424(a)(1)
When, through some change in business conditions, the usefulness in the business of some or all of the capital assets is suddenly terminated so that the taxpayer discontinues the building or discards such assets permanently from use in such business, he may claim as a loss for the year in which he takes such action the difference between the cost of the assets less depreciation, etc., and the salvage value thereof. This exception does not extend to a case where the useful life of property terminates solely as a result of those gradual processes for which depreciation allowances are authorized, nor does it apply to inventories or to other than capital assets. The exception applies to buildings only when they are permanently abandoned and to machinery only when its use as such is permanently abandoned. Any loss to be deductible under this exception must be fully explained in the return of income.
4.26 Ark. Code R. 51-424(a)(1)