That's the way I read it Dave. I also use Turbo Tax and looked up everything I could find on the subject. Essentially, that grand that was taken as a deduction as equipment purchases was not taxed during that tax year--it was a deduction on your schedule-C. The following year the keyboard is sold for $700--that's $700 bucks you'll have to claim so Uncle Sam can get the taxes on that amount. It ain't free money! Lets say you sold the keyboard for $2,000, but still deducted the $1,000 you paid the previous year. Accoding to my tax program's information, and according to my tax books, you just gained $2,000 in taxible income because you subtracted $1,000 from last year's gross income and didn't pay taxes on that amount. This ain't rocket science--it's just common sense.

Gary