Yes, you can depreciate. Figuring the value to depreciate from is somewhat simple. Of course, it's best to get a physically separate appraisal by a qualified property appraiser. But there are ways. The important thing is, you have to be able to support your numbers if audited. Here's one way to do it.
Look at your property tax bill. It will show you the value of the land and the value of the structures on that land. Lets say for example, it values the land at $20K and all the structures at $80K. That means the total value of your structures is 80% of the total appraised value of the entire property.
Now look at the HUD-1 you received at the closing when you purchased it. Let's say you paid $200,000 for the entire property. Okay, so 80% of 200K is $160K. Now you say you have two physical buildings on the property and you're going to use one of them for business. Time to look at square footage.
The total square footage of all structures is usually listed on the property tax bill. Lets say your total square footage is 10000 square feet. With a cost of $160K for the structures, that comes to $16 a square foot for the total of structure floorspace for all structures on the property.
So if the building you're going to use for business is 2500 square feet, then 2500 square feet times $16 a foot comes to $40,000, and that's what you'll depreciate from over the next 39 years.
Note that depreciation is based on the LESSER of what you paid for it, or it's fair market value at the time you place the asset "in service" for the business. Also be aware that your tax bill is NOT fair market value. Your county property appraiser does not appraise for fair market value (they never step foot inside your structures). They appraise for tax value only. That's why the tax bill value is almost always significantly lower than the fair market value.
