Questions for the CPA's

[Derek Tellier]

This may be a general question and if the answer is it depends then please let me know what information might be needed. 

Clients (Married couple, he's retired, she still works) own and have lived in the same SFR on 25 acres since 1986, bought it for $78K.

He recently had about 9 acres of it subdivided out and is putting it on the market. 

Based on location and recent sales of land in that area he could get upwards of $250K for it. 

Would he have to pay capital gains tax on the sale? 

In doing some research what I found is that if he also sells off the home and rest of the land within 2 years then he'd qualify for the $500K Capital Gains Exception since it would count as 1 transaction to the IRS because he'd have sold off his primary residence. However if he doesn't sell the home and rest of the land within 2 years then he would have to pay capital gains tax on the sale of the 9 acres. 

Can any verify or clarify this? 
I know he needs a CPA but wanting to do a little research first so I can speak intelligently to him about what he should expect to hear from the CPA. 

Thanks

[Steven Hamilton II]

In reality you should not be advising about that part AT ALL on tax implications. You should be saying directly  "that is a conversation to have with your accountant as I cannot advise you on the tax consequences." You should consider pointing him to a couple different accountants so he can get his own advice.

There are facts and circumstances that may be unknown to you that you wouldn't know how to probe. Was any of this worked for agricultural or business purposes?

The short version is a remaining sale would have to happen at which point he could amend for a refund within the appropriate time frame; however, there are other facts and circumstances that may cause issues.