First Turn CAPS LOCK OFF .
I personally would not sell unless they have put a dollar sign on it you can't refuse . Also ask them what kind of tax breaks they will give you.
This is the wife chiming in here (sorry, husband): First of all, you can hold out for a while and get a good price.
Second, it is not wrong to 'mud it up' if it is still in your possession. Anytime after that the land is no longer legally yours and you will be subject to trespassing charges if caught. The law will not care that it used to be yours, just whether you have the right to be there or not. You may be able to get written permission to wheel as long as you don't interrupt construction and waive your right to sue should you get injured.
As for tax breaks for selling land to the govt at any level may be non-existent. I would definitely go to a CPA or reputable tax firm at tax time. It's too complicated for your regular tax services. And that money does count as income and is subject to income tax. And as for not selling because they have land will not always work. There have been right of way laws for decades. If you do not sell and there is no alternative place to cut the road in, they will seize the land under that governmental right and give you whatever they want to for it, not what you have worked your way up to during negotiation.
"Right-of-Way
Right-of-way is the process where the NCDOT obtains necessary lands for the construction and improvement of highway projects. This is the last major activity to occur between the completion of design for highway projects and the release of the project to bidders for construction.
In many cases, it is inevitable that a certain amount of private property must be acquired. The displacement of homes and businesses is minimized to the extent practicable. In the acquisition of right-of-way, the NCDOT must treat all property owners with impartiality, fully explain all legal rights, pay just compensation in exchange for property rights, furnish relocation assistance and initiate legal action should a settlement not be reached."
Source: NCDOT
url:
http://www.ncdot.org/projects/roadbuilt/road.html
No matter your state, there will be a similar law.