I was in the same situation as you 4 years ago. Bought in 2007 and couldn't sell in 2010, so we've rented ever since.
For cost basis, I just used the purchase price. It is anyone's guess what "market value" was on the day I decided to rent. I could have added upgrades, but they were insignificant compared to the purchase price.
You cannot depreciate the portion of the cost basis attributable to the land, only the structures. To figure the land, I went to the county property assessor's website and subtracted the county's value of the land. Again, it's anyone's guess what the structure was worth on the day I decided to rent.
Renting was an excellent choice. The house makes positive cash flow and the expenses and depreciation deductions wipe out any tax. If your total AGI is below $100k, you can offset up to $25k of passive losses against other income. This phases out to $150k AGI.
Usually your assessment is much lower than your actual basis so instead of subtracting the land value, you should figure out the percentage. For example, if my assessment is $175,000 with $50,000 being land that is 28.57% land. So 100-28.57% times my cost of $250,000 is $178,575 to depreciate, not $200,000 ($250,000 - the assessed $50,000)
Directly from IRS.gov -
"Example.
You buy a house and land for $200,000. The purchase contract does not specify how much of the purchase price is for the house and how much is for the land.
The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land.
You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land.
Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000)."
http://www.irs.gov/publications/p527/ch02.html