Technically it does NOT reduce your basis as much as it adjusts it.
When you sell any property that was being depreciated(using the 179 deduction, the regular or special depreciation options), the depreciation is always recaptured and taxed at a rate of no more than 25%. This portion reduces your cap gains so only the gains above the recaptured amounts get the preferred cap gain treatment.
You MUST take some kind of depreciation on an asset ... it is a requirement not a choice. The only choice you have is how fast you can depreciate the cost. If you have not properly been depreciating a property then seek out local professional guidance to get the massive error corrected ASAP.
