Allowable
(4) Allowable(i) In general. For purposes of applying paragraph (c)(1)(ii) of this section, depreciation or amortization in lieu of depreciation (collectively, depreciation) is allowable with respect to energy property if such property is of a character subject to the allowance for depreciation under section 167 of the Code and the basis or cost of such property is recovered using a method of depreciation (for example, the straight line method), which includes any additional first year depreciation deduction method of depreciation (for example, under section 168(k) of the Code). Further, if an Internal Revenue Service adjustment with respect to the Federal income tax or information return for such taxable year requires the basis or cost of such energy property to be recovered using a method of depreciation, depreciation is allowable to the taxpayer with respect to energy property.