The short answer is that you should probably go to a tax profession that is experienced with farming.
The tricky thing is to determine what adding you to the title in 1992 was about. It could have been a "Gift", or it could have been merely for Estate planning purposes.
If your parents' filed a Gift Tax return, it would be Gift. If $240,000 in 2000 was roughly 1/2 of the Fair Market Value, that would support it may have been a Gift. The fact you were living and working on it supports it may have been a Gift. If $240,000 was the full value of the property in 2000, then it probably would not have been a Gift. Adding you to the title then later selling it to you could go either way.
For the sake of my comments, I'll assume it was a Gift.
That means you received 1/2 of your parents' Basis in 2000. Their Basis would usually be what he paid for the entire property (including improvements) and then subtract any depreciation (such as on any farm building or a home office in the house). Unfortunately, in some cases finding out his costs and depreciation can be tricky.
Then you add that to the $240,000 that you paid, plus the cost of any improvements that you made, minus any depreciation that you were eligible to take.
However, you would also need to allocate the $240,000. Besides farmland, there was the house, perhaps farm buildings (barns, silos, etc., which you need to have been taking depreciation on,and depreciation lowers your "Basis"), and probably some machinery.
So then you may have FOUR Basis' (costs): (1) farmland (2) farm buildings (with depreciation), (3) machinery and tools, and (4) the residential home.
When you sell, the sales price will also need to be divided up by those categories.
Because you have been using it as your Main Home the entire time, the sale of the home will likely be tax-free. Any Gain from the rest of it will be taxable. The gain from the farm buildings and machinery will likely be taxed at your regular tax rate (but part of it may be taxed at the long-term capital gain rate). The gain from the sale of the farmland will likely be taxed at the long-term capital gain rate (usually 15% but there are variable with that).
If you have incorrectly not been taking depreciation on any farm buildings or machinery, a tax professional can file Form 3115 to try to correct that situation.
As you see, it can be quite complicated (and I likely missed a few points), which is why I recommend going to a tax professional that knows farming.
