I received a 1099-S from the state department of transportation because it purchased a small piece of land from my house as easement. The purchased land is roughly 1% of the size of my house. The 1099-S only list the total proceeds. So I try to figure out the cost basis of my house.
First, shall I use the cost basis of the whole house or 1% cost basis of the whole house as the purchased land only is 1% of the original house.
Second, besides the price I paid for the house, I believe I can also claim capital improvement deduction. Can I consider the cost of landscape design including all new plants, fireplaces, etc as the capital improvement (the house was new construction when I bought)? what about the security system cost, new gas pipe lines?
Any advice would be greatly appreciated!
