No appreciation for depreciation?

DEAR HARRY: Maybe 40 years ago, I bought some printing equipment, including a good-size printer and collator. I used them in a small business I operated from my basement in my spare time. I reported my income each year on my 1040. I was careful not to get caught up in that home-vs.-business-use mess with IRS. In 2011, I got a promotion that precluded my working any other jobs. I sold all my equipment and gave up all my outside income. My tax return for 2011 is being examined, and the examiner wants to change my return to include a profit on the sale of my equipment. I got a whole $2,000 for it, which was a lot less than my cost of about $15,000. He got the gain by making an adjustment for depreciation. I never deducted any depreciation. Just what is going on here?

WHAT HARRY SAYS: Your examiner is not up to date. IRS Revenue Procedure 2007-16 and 2011-14 give relief to taxpayers in your situation. You can get the benefit of that depreciation deduction at the time of sale. You will need to get the agent to give you the deduction allowed by Form 3115. If he fails to do it, insist on speaking with his supervisor, who will get things straightened out. Also, refer them to Section 481(a) of the Internal Revenue Code.