### Question
How is the term allowable amount defined?


### Answer
The term **allowable amount** is defined in *26 U.S.C. § 470* as the following:

> an amount equal to 20 percent of the lessor's adjusted basis in the property at the time the lease is entered into

#### Citation:
  - *26 U.S.C. § 470*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart C-Taxable Year for Which Deductions Taken**

