And the reason he doesn't want to claim the simplified $5 per s/f up to 300, is that even without depreciation he comes up with a higher amount?  Even when it allows all the interest and maybe more of the property taxes to be claimed as itemized deductions?  (I bet he's not itemizing.)  

Apparently he has high operating expenses and low cost basis.  Probably claiming 25% business use when that spare bedroom is closer to 10% of livable area. But @TaxGuyBill is correct, why pay income tax and SE tax at ordinary rates now, in order to save capital gains tax later?  I bet the guy also has a Roth IRA.