When you depreciate an asset and later sell it, you reduce your cost basis in the property by the amount of depreciation that you claimed in the prior year.
So if you purchased equipment for $25000 in 2015, you would claim the depreciation in 2015. In 2016, you would continue to depreciate the property until you stopped using it for business.
Then, if you sold it for $25000, you'd have a gain on the sale, that might look something like this:
$25000 sales price -$25000 cost basis + Depreciation allowed or allowable prior to the sale $5000 = Gain of $5000.
If you choose to expense this property rather than depreciate it, your gain when you sold it would be greater. Essentially, anything that you claim as a deduction in 2015 will become income to you for 2016.
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