Absolutely!
First, you have to use June 7, 1989, as your date for calculating the basis.
Second, you do the following math:
Basis = Cost of the property + Improvements made to the property - Depreciation on the property
For tax purposes, basis means the amount of investment you have on a property, which is why you include how much you paid, how much you have spent on improvements and reduce this total by normal depreciation.
