Tagteam is correct.
Your depreciable cost basis is based on what you paid for the property and depreciation is allowed on that portion, excluding land. You can't take depreciation on something you didn't pay for.
Another way to look at this is, when you sell, you won't have to recapture the "extra" depreciation you took, if you were able to constantly increase your depreciable basis and related depreciation. What would happen if you sold your property during a down market and had to recoup deprecation greater than the depreciable basis of your property? You may not have enough money from the sale to cover your income taxes.
Depreciation expense is an item that landlords may not know about and the fact that when you sell your rental, you have to claim all the previous years’ depreciation expense. This is called Depreciation Recapture and it's taxed in the year of sale. You may have to pay 25% on your depreciation recapture. See IRS Publication 544 Chapter 3 Depreciation Recapture, page 27.
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