Your cost basis is the purchase price, plus any improvements. Include repairs prior to placing the property in service (making it available for rent), and less depreciation (at a later stage when you start taking it).
You can absolutely depreciate the cost of the house and all I've mentioned above. Closing costs will have to be amortized. It may sound scary at this point, but TurboTax will walk you through all these details by asking questions along the way.
Taxes paid can actually be deducted on your Schedule A, if you itemize. Otherwise, include them with the cost basis.
And a very good question about the number of years for depreciation. Residential rental is depreciated over 27.5 years. However, if you've done Land Improvements, then those are depreciated over 15 years. If you added appliances -- those are depreciated over 5 years. And TurboTax will ask you all these questions. Your job is to keep track of the expenses so you can separate one type of purchase or cost from another, and then enter that information in TurboTax.
We have a number of amazing Help Articles on the topic of rentals. Here are some of them. I suggest you read through them and come back with more questions any time you have them. We are here to help.
@mstelick
How do I handle capital improvements and depreciation for my rental?
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