I found this on the web:
Conversion of Property from Personal Use to Rental Property
When you convert your personal residence to a rental property,
you can begin to claim depreciation in the year you converted it to
rental property because its use changed to an income producing
use at that time. The tax basis of the rental property is is the lower of
the following:
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The adjusted basis is the original cost of the building, excluding the value
of the land, plus permanent improvements and other capital costs, and
minus items that represents a return of your cost, such as casualty or theft
loss deductions claimed on prior tax returns.
Example: In 2004 Matt Fuller purchased a home for $160,000. The value of
the land was $30,000. Before he changed the property to rental use in
2010, Rich paid $20,000 for permanent improvements (a new furnace,
a new roof, and a remodeled bathroom). Improvements are added to the
tax basis of the home. Since land is not depreciable, Matt will include only
the cost of the house when figuring the basis for depreciation. The adjusted
basis of the house is $150,000 ($160,000 + $20,000 - $30,000). On the same
date, his property has a FMV of $185,000 of which $40,000 was for land and
$145,000 for the house. The basis for depreciation on the house is the FMV
on the date of change ($145,000), because it is less than his adjusted
basis ($150,000).