capital gains issues if subdividing a lot...

[Joe Smith]

OK, this is a situation that I saw on another board and it got me thinking about it...just my brain working here.

It's a 9 acre single parcel of land, that has 2 single-family homes on it, and a fourplex. He lives in one of the houses and has for 8 years. He bought the property in 1999 for $330,000 and has lived in one of the SFR's ever since.

Here's the question...since it will be far easier financing-wise to split off the property into three seperate deeds/parcels and sell each individually, how would the capital gains tax issue be solved if he did so?

If he could sell each SFR for $110,000, and the fourplex for $220,000 (for example), how would the tax issue be dealt with?

I presume if he sold the WHOLE thing, he'd pay no tax as it would be his primary residence (except for depreciation recapture on the rented portions). However, if he split them up, and sold the one he lived in, how would he document that tax-wise?

For the other two, would the capital gains tax be determined by taking their portion of the value of the original purchase?