When converting the entire property to a rental, the number of rooms and square footage do not matter. It's all 100% converted, and all 100% rental use. This would be true if you are living somewhere else, and are not restricting access by the tenant to any portion of the property or structure.
If renting out a part of your primary residence while you continue to live in it, things are a bit different.
For cost basis, use the most current tax bill to figure what the percentage of the cost basis is, between the land and the structure(s). Then you'll use that percentage against your actual cost basis to figure how much is allocated to the land. (what cost basis to use has already been clarified in this thread)
For depreciation, that gets figured based on the percentage of square footage that is "exclusive to the renter". So common areas are not included. If you live in a 2 bath house and the bedroom you are leasing out has one bath that can only be access from that bedroom, then you can (and should) include the floor space of the bath in figuring your percentage of square footage that is exclusive to the renter. You use the square footage percentage for figuring depreciation you can claim on the SCH E.
For all other expenses, you have two choices, and you don't have to use the same one every year.
1. You can claim the percentage of all other expenses equal to the percentage of floor space exclusive to the renter.
2. You can based your percentage of expense deduction based on the number of people living in the property. For example, if you and your spouse live in the property as your primary residence and a single renter lives in one of the bedrooms, you can claim 1/3 of your expenses on SCH E.
There is one exception. If the property has a landline telephone you can't claim any of the telephone expenses on SCH E. Doesn't matter if you share it with the tenant or not. The IRS says you can't claim a penny for the telephone service on SCH E. However, if you have a 2nd line installed and it's for the exclusive use of the tenant, you can claim 100% of that cost on the SCH E provided of course, you are the one actually paying for that 2nd line.
Also, in order to claim any portion of an expense on SCH E, the tenant must have access to that utility. For example, if you have Satellite TV and you do not provide the tenant a receiver for the service in their room, you can't claim it on SCH E.
Now with my knowledge of how the program works, when that first year's depreciation is figured by the program, dollars to donuts it's going to be wrong. Once you confirm it's wrong, let me know and I'll show you how to fix it without disabling your ability to e-file.
To confirm depreciation, see IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf and use the MACRS worksheet on page 37. The table that applies for line 6 of the worksheet is table A-6 on page 71.
