Since you did the renovation prior to making the property available for rent, you just add the rental portion of the renovation cost to the basis . In other words, you set up a rental property for that part of the duplex. You would ordinarily enter the rental part cost according to how you are allocating it, using the square footage of the rental part, or whatever method you are choosing. Now, when you enter the cost of the rental, you will include the rental portion of the renovation costs in the cost basis for the rental.
