You will enter a value for the building and the land.
The value will be the appraised value on the date you inherited it plus improvements.
The improvements you made will be added to the basis of the building.
You won't use the tax statement if the value is larger since you must use your cost or Fair Market Value, whichever is lower.
If you are unsure of how to brake out the building and land from your total value, ask a local real estate agent for help. They should be able to give you an idea of what the rate of vacant property to improved property value is in that area. You can use that same RATIO. You can also use an appraiser, but again, you are just looking for a ratio, you can't change the value unless the value has decreased.
Remember that land does not depreciate and when the rental is eventually sold, if any depreciation is recouped, that amount is taxed as Ordinary Income.
Any improvements you add going forward are added as new, separate assets and depreciated separately.
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