allowable depreciation is deducted from a taxpayer’s initial basis in calculating the adjusted basis

That’s correct. Allowable depreciation is deducted from a taxpayer’s initial basis in calculating the adjusted basis of an asset for tax purposes.

The initial basis of an asset typically includes the cost of acquiring or producing the asset, plus any additional expenses incurred to put the asset into service. Allowable depreciation is the portion of the asset’s cost that the taxpayer can deduct over time as a depreciation expense, reflecting the gradual wear and tear, obsolescence, or depreciation of the asset.