land value is higher than total amount paid for house

[Chris Clemptor]

I'm trying to find out what my depreciation amount is. I just finished reading "Every Landlord's tax deduction guide." I am brand new to land lording and this will be my first time doing taxes with rental income.  I bought my house August of 2011 as a foreclosure for 85,000. I lived in the house alone until this past November I rented out half of the house to a few renters. I have always paid property taxes based on my house being worth 200,000.  Today I looked online for the first time to find what the "land value" is because I know I have to base my depreciation number on the value of the house itself and any material improvement and of course divide everything in two because I still live in half the house. My county has my land value at 90,000 and my house value at 120,000. 

My understanding is I have to use the number that I actually paid for the house plus any material improvement costs that I spent the renters unit. I have spent thousands of dollars on materials but I did 100 percent of the labor of the years. It seems like I could not even use 85 k  as my base number that I bought the house for because a percentage of that 6 years ago must have been considered land cost?

I'm guess investors must run into this issue since they are always buying houses cheaper than what the city says the house is worth.

Any suggestions?

Thanks in advance