Which aspect affects the amount of depreciation allowed to a taxpayer?

The amount of depreciation allowed to a taxpayer is primarily affected by the basis of the property. The basis represents the cost of acquiring or improving the property, which serves as the starting point for calculating depreciation. When a taxpayer purchases an asset, they typically begin with its purchase price as the basis. This amount will include not just the purchase price itself but can also encompass related costs such as installation, shipping, and any other costs incurred to put the asset into service.

As the asset is depreciated over its useful life, the calculation is rooted in this basis amount. Different assets may have different depreciation methods (like straight-line or declining balance) and useful lives, but all calculations ultimately derive from that established basis.

While other factors, like the taxpayer's income level, the type of business entity, and the location of the property, can influence overall tax liability or eligibility for certain deductions, they do not directly change how much depreciation can be claimed for a specific piece of property.