The irs can only see the transaction that was reported to them. If this is for the sale or equipment you can apply the basis rule. Lets say you bought a piece of equipment for $10,000 and sold it for $8,000. The irs sees the $8000 sale not the purchase of $10,000. All you need to do is report said sale as a $2000 loss and produce the receipt of original purchase. If you have also sold equipment where you made money from your original purchase you will be able to use the loss from other sales to offset this gain. What if you don’t have receipts? Just report what you think it was and best rule with the irs ( which is the criminal collection division of the dc cartel) report at least a small gain say $250 and pay the tax on that amount. Just make sure the amount you report does not move you into the next bracket and impact your cap gains on investments or you social security taxation.
