I am not licensed in Indiana, so this answer will have to be academic/generic by necessity. Please be sure to consult with a good local real estate attorney lawyer to be 100% sure my analysis is accurate for your jurisdiction. And I most certainly defer to my colleagues from Indian here on AVVO.

That said, I agree with my colleague; adverse possession may not be your only remedy, but these doctrines are very fact-intensive, so you will need to consult with a good local real estate attorney to be sure. Generally for AP, you need to show by clear and convincing evidence - that you have had a minimum of 20 years of continuous, of open, hostile, exclusive possession of the property - and that you paid the taxes - which it appears you may have not - and there can be no recorded instrument that refutes such a claim. It's possible, but you'd have to go through all of these elements and see what you got in the way of evidence. Not sure (i.e., form the facts you posted) if you have another way to "own" that property; so as my colleague suggests, negotiating with the neighbor might be your best bet here.

See the State statute on this below - this may not be current, however, so again, be sure to check with a good local attorney before doing anything.

Hope this helps.

gsgTITLE 5
PROCEEDINGS IN CIVIL ACTIONS IN COURTS OF RECORD
CHAPTER 2
LIMITATION OF ACTIONS
5-210. Oral claim -- Possession defined -- Payment of taxes. For the purpose of constituting an adverse possession, by a person claiming title not founded upon a written instrument, judgment or decree, land is deemed to have been possessed and occupied in the following cases only:
(1) Where it has been protected by a substantial enclosure.
(2) Where it has been usually cultivated or improved.
Provided, however, that in no case shall adverse possession be considered established under the provisions of any sections of this code unless it shall be shown that the land has been occupied and claimed for the period of twenty (20) years continuously, and the party or persons, their predecessors and grantors, have paid all the taxes, state, county or municipal, which have been levied and assessed upon such land according to law. Provided further, that adverse possession shall not be considered established under the provisions of any sections of this code if a written instrument has been recorded in the real estate records kept by the county recorder of the county in which the property is located and such written instrument declares that it was not the intent of a party to such instrument, by permitting possession or occupation of real property, to thereby define property boundaries or ownership. Provided further, that for purposes of establishing adverse possession pursuant to this section, a person claiming adverse possession must present clear and convincing evidence that the requirements of subsection (1) or (2) of this section have been met.

History:
[(5-210) C.C.P. 1881, sec. 150; R.S., R.C., & C.L., sec. 4043; C.S., sec. 6603; I.C.A., sec. 5-210; am. 2001, ch. 290, sec. 2, p. 1028; am. 2006, ch. 158, sec. 5, p. 475.]

No, adverse possession would not be your only course of action. In fact, even if you would clearly prevail in court, you may first want to approach your neighbor and try to resolve the matter. You might explain that you believe the land is yours under a theory of adverse possession, but that you are willing to purchase it from him to clear everything up. If he accepts, get an attorney to work out the legal work. If he does not accept or you don't feel comfortable talking with you neighbor, hire an attorney to put a little more pressure on him. A good attorney will contact your neighbor, kindly explain that the property is likely yours under the doctrine of adverse possession (in an amicable phone conversation and perhaps a formal, convincing letter), and offer your neighbor a small amount to resolve the issue (perhaps what you offered before). A smart neighbor will take this offer. If he doesn't and court becomes necessary, both parties will spend much more money than its worth. Not only will you spend tons of money, you'll probably have an enemy as a neighbor. Basically, get a good attorney who knows how to efficiently solve problems outside of court.