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    Differences between 'allowed and 'allowable' depreciation

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    What are the differences between "allowed depreciation" and "allowable depreciation"? What effects do allowed depreciation and allowable depreciation have on adjusted basis?

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    The concept of allowed depreciation simply means the amounts that can be taken using the methods available in income tax law. Both the methods and the lives contribute to the amount of depreciation that is allowed.

    The concept of allowable depreciation is more interesting: it says that if you could have and should have taken depreciation, and you ...

    Solution Summary

    In four paragraphs with a comprehensive example, the concepts of allowed and allowable are demonstrated quite effectively.