Final answer:
The statement is true; allowable itemized deductions when subtracted from AGI result in the taxable income, which is used to calculate the owed tax amount.
Step-by-step explanation:
The statement 'Allowable itemized deductions are deductible from adjusted gross income (AGI) in arriving at taxable income' is true. This is a principle of personal income taxation in the United States. Taxable income is calculated by subtracting allowable deductions (including itemized or standard deductions) and exemptions from your AGI. If a taxpayer chooses to itemize deductions, these may include mortgage interest, charitable contributions, medical expenses, and state and local taxes, among others. This process affects the calculation of the taxes owed, with tax rates applying to different levels of taxable income after deductions have been accounted for.