1031 Exchanged into a house and another parcel of land

[Gregory Vajda]

Hi all,

We are about to close on our replacement property which happens to be a single family home with an adjoining piece of land (Separate Lot).  The price of the deal is 729K and I would think just the house and lot it is sitting on would appraise at that.  The adjoining lot is valued at around 200K, could I sell the land and do another 1031 or since it wasn't another "investment" would I simply have to pay capital gains tax on it? I've tried searching the internet but haven't had any luck in figuring out the best way to navigate this.