The basis of the property after you repossessed it is the same as what your basis was before you 'sold' it. You must also claim the payments that were made as income.
https://www.irs.gov/publications/p537/ar02.html#en_US_2014_publink1000221753
The depreciable basis is the lower of (1) your basis and (2) the Fair Market Value when converted into a rental property.
