What due diligence in determining cost basis for depreciation
In reviewing my taxes for the upcoming year, I've been looking more closely at my Schedule E and reading more about depreciation and cost basis. I know that your cost basis needs to be accurate, a number the IRS agrees with you on, but what constitutes due diligence in choosing this number?
In my situation, most of my property's market value comes from the land, not the dwelling. Additionally, I have 2 recent appraisals showing different values as well as 2 years of tax statements where the tax assessor placed significantly different value on the dwelling. On top of this, I house hack so I only attribute a percentage of the dwelling as eligible for depreciation.
All that said, it seems I have a significant amount of room to choose my cost basis and provide evidence for each. What is the most proper approach in this situation and what would the IRS want to see in the event of an audit?