If a business mistakenly claims too little depreciation, the business must only reduce the asset's basis by the depreciation actually taken rather than the amount of the allowable depreciation.

Question

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If a business mistakenly claims too little depreciation, the business must reduce the asset's basis by the amount of the allowable depreciation that was not taken. This adjustment is made in the year of discovery and is reported on the business's tax return form.

If a Business Mistakenly Claims Too Little Depreciation, the Business