I think you are looking at two different issues. For the sale of a property the basis is going to include the structures, land, closing costs and improvements. That is then compared to the selling price less closing costs, and that will yield your profit or loss.
On a separate note. While you own the property you will have to depreciate it. The basis is what you purchased it for plus perhaps some closing costs. You will then separate the land from the structures. The IRS does not allow you to depreciate land. The balance of the structure basis will then be depreciated on an appropriate depreciation schedule.
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