I guess there is more than one way to correctly skin this cat.
There is. Basically, with a total loss declared, you've basically "sold" the structure to the insurance company.
If your intent is to sell it, whatever proceeds you spend to clear the land can be added to the cost basis of the land. That will help reduce your taxable gain on the sale of that land if/when you sell it later. I assume the fire and insurance payout was in 2021, and if selling, the land sale will occur in 2022 or 23. My method allows you to treat the separate sale of the land in a later tax year, as the sale of a business asset since that it what it was used for prior to the fire.
