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Publication 946
taxmap/pubs/p946-022.htm#en_us_publink1000107523

What Is the Basis for Depreciation?(p35)

rule

Words you may need to know (see Glossary)

The basis for depreciation of MACRS property is the property's cost or other basis multiplied by the percentage of business/investment use. For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1. Reduce that amount by any credits and deductions allocable to the property. The following are examples of some credits and deductions that reduce basis.
For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code.
Enter the basis for depreciation under column (c) in Part III of Form 4562. For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1.