"She took down the old summer house and built a new house"
I'm assuming this one is yours. You should be able to get the cost of that, especially if she got a loan to do it with.
"Seems I need to use the amounts in the "gift letters" and the cost of the house. Those records are pretty accurate. "
Didn't know you had that. Had I, it would have saved us a lot of time. Those are the amounts to use, assuming those letters have her cost basis in it - be it what she paid for it or whatever. So long as it's "reliably accurate" to the IRS, you're fine.
