How to determine the base for an appreciated rental property?

[Yan Kang]

Hi fellow investors, I would like to get your advice on how to determine the basis (for both cost basis and depreciation purposes) for a rental property that has appreciated considerably (say from 400k to 500k) from the time it was purchased (say after 6 months), but before leasing out? Since the market value has changed a lot (100k in this case), should the basis be the new market value prior to renting out (i.e., 500k)? If so, how to provide support for the new basis, which is much higher (100k) than the original purchase price?

Thank you very much for your attention and advice in advance.

Best.

Yan