Given the facts you mentioned, the mower sold at the beginning of 2012 would be ordinary income of $1,700. The math would look like this:
Purchase Price: $3,500
Accumulated Depr: 3,500
Adjusted Basis: $0.00
So, sale price of $1,700 less adjusted basis of $0 is a gain of $1,700. This is referred to as depreciation recapture of Section 1245 property. Basically, the IRS is not going to allow you to treat the sale of the mower as a capital gain b/c the depreciation used in prior years offset ordinary income. See linked IRS publication below for further reading if you are interested.
As far as the new mower purchased for $7,500, you will be have a variety of options to depreciate the asset. If purchased in 2012, it will be eligible for Section 179 expense. That means you can deduct the entire purchase price of the mower in the first year. You could also choose to depreciate the mower over five years.
Many accountants let the the tax tail wag the business dog. What I mean is that many CPA's or EA's will recommend spending and deductions that lower your tax liability, but don't make much business sense. I think this is short sighted and ends up with the client being frustrated in future years. If you have financed that mower and decide to expense the full $7,500 on your 2012 tax return, any payments made in 2013 and beyond will not be tax deductible b/c you already used up the entire deduction in 2012.
I would also recommend searching for an accountant that is proactive. If you are only seeing and talking to your accountant at tax time, you are not able to utilize any tax planning or business planning services which is where the real value comes from. You are basically paying your accountant to fill out tax forms for you.
If you have other questions, I'd be happy to help.
Gabe Lumby, CPA