Q. When I purchased the furnaces I could have taken the entire cost as an expense in the year purchased...right?
A. No. The option to "expense" an improvement is very limited and a $10K furnace would not have qualified.
Depreciation is a deduction of your cost basis, over the years. When you finally sell the asset, you get to deduct your cost basis from the sale price. Depreciation recapture keeps you from double dipping (deducting it twice; over the years and at sale time)
