There is place where you indicate what type of asset you are selling and one of the choices is Land.
There are two components to your basis: 50% is the value when your wife's aunt died - 1/2 of $20,000 or $10,000. The other half is what your wife paid for the property in 1974. There are property records that will show that amount. You should contact the county tax commissioner's office where the property is located.
If the property was held as an investment, as opposed to personal use property, then you can add the $6,500 to your basis. If you were to use a cost basis of zero for the unknown part of the cost basis, your basis would be $16,500. The $2,500 in closing costs would be a reduction in proceeds. So now you have:
Sales Proceeds - $34,000
Cost Basis - $16,500
Long Term Gain - 17,500
I'm not recommending you use zero for 50% of the basis, I would research the real basis or come up with a reasonable estimate.
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