Hmm.. Mine is listed on the main Asset Entry worksheet for the Residential structure. I filled it out when I added the rental in 2019, and it asks for Total Cost on line 4 (similar to every other depreciable asset we enter over time) and then the amount for land on line 8. I remember it was very clear on my property tax records how they split the percentage so I just went with that as I figured as long as I keep it consistent I should be fine moving forward. So for me, TT has just carried over the building portion as the Total Cost (Ln 4) minus the land (Ln 8 ) and used it as the depreciable basis. Do you have the land sale reported on Form 4797 Part I?
So check your Asset Worksheet somewhere underneath the Form 4562 in the Sch E section and see if it has a land cost on line 8 for the original house purchase. Fiddling around I did see that form somewhere you could report a non-depreciable land asset and cost to purchase it as the same, but that looks a little too scary to me if it's not according to IRS guidelines. If it looks like you're avoiding depreciation recapture it could flag something, especially if you're just now reporting the land basis on Form 4797 Part I.
