Cost Basis of house for 1099-S

[Hardway]

I received a 1099-S from the state department of transportation because it purchased a small piece of land from my house as easement. The purchased land is roughly 1% of the size of my house. The 1099-S only list the total proceeds. So I try to figure out the cost basis of my house. 

First, shall I use the cost basis of the whole house or 1% cost basis of the whole house as the purchased land only is 1% of the original house. 

Second, besides the price I paid for the house, I believe I can also claim capital improvement deduction.   Can I consider the cost of landscape design including all new plants, fireplaces, etc as the capital improvement (the house was new construction when I bought)? what about the security system cost, new gas pipe lines?

Any advice would be greatly appreciated!

[PatriciaV]

If you no longer own the land and will not pay property taxes on it in the future, report this as an Investment Sale. Your basis will be the percentage of the square footage sold in relation to the total square footage of the land you own multiplied by the cost of the land (not the entire property). A recent tax assessment should provide the information you need to make that calculation.

Your basis in your home is increased by the improvements you make after you purchased the home. If the portion of the property that was sold includes specific improvements that you can document, then include those costs in the total land basis. For instance, if a hedge or flower bed was added to that portion and sold with the land, you would include those costs.