Take what you paid for the property when you originally purchased it. Add to that the cost of the property improvements you have done during the time before you converted it to a rental. Write that figure down.
Now look at the FMV of the property "today". Note that the FMV of the property today already includes the property improvements. Those improvements are not separate for this. Typically, you'd need an appraisal, but it's not required or necessary really.
You depreciate using the "lower" cost. Most likely, the lower cost is what you paid for the property originally, plus the cost of any and all property improvements you have done prior to converting it to a rental property.
