For your basis, you would use the lesser of your basis (original cost plus the cost of improvements) or the fair market value on the date of conversion to rental use.
Presumably, the cost of construction plus improvements would be lower than the fair market value in 2016. However, you do need some sort of documentation in the event there is a question revolving around your cost basis. Is the contractor still in business? If so, you should be able to get invoices, contracts, et al. from the contractor(s).
One other issue is whether you have been taking depreciation deductions each tax year since you placed the property in service as a rental in 2016. If you have not, you will need guidance from a local tax professional.
