The basis of the land you sold in MA is the original cost that you paid for the land in 1993 and to that you add any improvements, such as the sheds. The only costs that can be added to the basis related to the clearing of the land is any out of pocket expenses you incurred. Nothing can be added related to your labor. You may be able to capitalize interest and taxes under Section 266: Section 266 allows taxpayers to capitalize taxes, interest, and carrying charges that would otherwise be lost or limited under other provisions in the tax code. The election is made on a year-by-year basis and can be for any or all of those three categories of expenses.
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