There is a lot here to address, so I may leave something out.
1) (not sure if I can consider any labor expense for myself, another question I only now as I am typing this even thought of). No, you can't.
2) At the time of the conversion, the basis for depreciation was the lower of FMV or adjusted basis. I'm not sure what you chose.
3) The basis is determined by original purchase price plus improvements minus depreciation. The FMV does not enter into the equation.
4) Any depreciation is recaptured as ordinary income, not capital gain.
5) As you made each improvement, it should have been depreciated over the years. You got one sale price, that covers the building, land and all improvements.
6) Yes, you must separate the land from the building. Since it is not depreciable, it was separated out when you began entering the rental. If may have increased or decreased in value or stayed the same in relation to the building.
7) Costs of the sale are prorated between land and building. If the land is 10%, then 10% of the closing costs go to land.
