Which amount is appropriate to use for depreciation purposes (minus land value)?
Since you're renting 17% of your floor space exclusively to the renter, then 17% of your original cost basis that you paid for the house is the cost basis used for depreciation.
Your cost basis is what you originally paid for the house when you purchased it back in 2007, plus the cost of any property improvements you paid for *at* *any* *time* *after* you originally purchased the house.
For depreciation, the program will figure that 17% "for you" unless you specifically and explicitly tell the program you don't want it to.
Understand that depreciation is figured on the value of the structure "ONLY", as land is never depreciated.
Regardless, when you are done, chances are what the program shows as it's final figure for depreciation will be wrong. If this happens to you then let me know. That way, I can show you how to "fix it" without an over ride so you will still be able to e-file and retain the TurboTax 100% Accuracy Guarantee.
To confirm the amount of depreciation is correct use the worksheet from IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf The MACRS worksheet is on page 36 and the table that applies for line 6 of that worksheet is Table A-6 on page 71.
