Determine cost basis on property exchange

I own a vacation home on 1.02 acres on a lake.  We bought the land for $75000 and made capital improvements of $230000 (built a house, added a boat dock, landscaping, etc).  The property owners next to us built a house too close to our property line (12 feet instead of 15 feet as listed in the covenants).  After owning the property for a couple years, they decided to sell and could not due to the violation.  The only recourse was to do a property exchange of approximately 109 sq ft with them.  The property line was redrawn to give them another 3 feet of our property adjacent to their house, and we got the equivalent square footage of their property on the backside (away from the lake).  In addition they paid us $25000 because this is a narrow portion of our land and losing that 3 feet of land has impacted what we can do if we want to build a garage.  We would no longer be able to build a 2 car garage, we would only be able to build a 1 car garage.

I am trying to determine to cost basis of the land.  If I just due the straight math, it would only come to around $200, however that portion of the land had a much larger value to us than that.  Would using the delta in property value between a 2 car and 1 car garage be reasonable?  Lake property is fairly unique, 1 acre of land that is waterfront is worth the same as 10 acres of land that does not have water access.