Depreciation as it relates to cost basis

[Justin Long]

I may be thinking about this way to hard. However, I am also a newbie to REI and the tax implications therein. My scenario is simple: Single family home purchased by me and in my name, mortgaged property, and rented out.

Once I have determined total cost basis in the property (purchase price + additional costs to close, etc.), I can then separate the land from the amount.  Then I apply straight line depreciation (structure basis/27.5) for the tax year.  My question is, does my basis for the following tax year decrease by the deduction amount I took in the previous year?  I wouldn't think so, as this would be by definition, NOT straight line.  However, after reading IRS publication 946, it seems unclear, as it states under the Adjusted Basis section on page 12;
"Basis adjustment for depreciation allowed or allowable. You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). Depreciation allowable is depreciation you are entitled to deduct."

Am I reading this incorrectly?  Please help!