You have the correct idea regarding the depreciation. If you are renting half of the house, then only half of the house should be depreciated. However, that is not one of the items that TurboTax will calculate for you.
To verify what is going on, go to the Assets/Depreciation section of your Rental Income and Expenses. When you see the Asset Summary, edit the entry for the house itself. Without making changes, you can go through this section to the end where you can select to see a detailed summary of the depreciation calculation. You should be able to confirm that the full cost basis is being used and the house shows 100% business use.
Click through the rest of this section until you go back to the area where you can Edit the entry again.
As you go through each screen, pay close attention to the messaging that you see. Look for the screen that says 'Tell Us About This Rental Asset'. There may be a message on that screen that tells you to enter only the rental percentage of the asset for depreciation. That means that if you are renting half of the house, you would enter half of the cost basis.
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