Using an example:
You bought the Home in 2000 for $125,000. The land was worth $25,000 and the house $100,000. In 2013, you remodeled the house for $10,000. Your cost basis in the building is $110,000 (100K + 10K). $110,000 is the amount you should have started depreciating when you converted the house to a rental in 2014.
Alternatively, you could have entered two assets, for depreciation in 2014: 1. "Building" at $100,000 and 2. "Remodel" at $10,000.
Now that you are going to sell it, you enter your cost basis as $135,000 (125K + 10K). You then enter the depreciation recapture on the $100K that you depreciated and the $10K you should have depreciated.
As others have said, you may want to file amended returns for 2016 and 2017 and actually claim the depreciation missed. It is too late (after 4-15-19) to amend 2014 and 2015.
Money spent, after the property is taken out of rental service, and improved before sale, is added to the cost basis. Continuing the example, if you spent $5000 on fix up costs, your cost basis is $140,000 (125K + 10K + 5K).
Also as others have said, you want to get your tax return done professionally.
