"Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit)"

Okay, if we temporarily ignore the "from which you received a tax benefit", then my original thought be correct, right?

§1250(b)(3) says "if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed [depreciation you actually deducted, in this case $0] as a deduction for any period was less than the amount allowable, the amount taken into account for such period shall be the amount allowed"

Right?  That is where my original thought comes from.  That "allowed" means depreciation that was actually taken.  So just from that, the exclusion would cover the depreciation.


As for the "from which you received a tax benefit", I don't remember that.  However, would that necessarily need to be one-way?  By not claiming depreciation, it caused you to owe more tax.  So it isn't a 'benefit' to save taxes, but it DOES affect the amount of taxes (but in a negative way).  Logic would dictate it should go BOTH ways.

Any idea if there is any 'official' guidance in that definition?