My wife and I purchased two lake lots in 2007 for $34,500. We financed them and paid them off in 2017. We can sell them in 2020 for $97,500. Our AGI will be about $84,000 in 2020. Question 1: can we use the interest paid on the loan to add to the cost basis for calculating the LTCG? Question 2: We improved the lots with a cabin and fishing pier. We spent money, but also did much of the work ourselves. Is there a way to use this "sweat equity" in calculating the cost basis, used to subtract from our gross profit?
