Because you rebuilt the house after the fire using the insurance settlement, you ignore both the fire damage and the settlement, and the basis remains whatever you paid in 1999.
That is true except @chuckjim can't ignore the fact that the insurance settlement was $560,000 and $450,000 of that was spent on building the new house. That leaves a gain of $110,000.
If the records were destroyed in the fire, an estimate of the cost of materials could be used as an approximation for the basis in 1999. The IRS does understand that docs get destroyed in fires and other casualties.
