Home sale tax exclusion

[Jon Klaus]

When selling a primary residence that conforms to the rules of the home sale tax exclusion, does simple subdivision work?

The home is on a small acreage, say 3 acres. Owner completes a simple sub-division into three plats, one with the home. Owner sells all three in the same year to different buyers. Are all three sales excluded from tax under the home sale tax exclusion? All three were part of the homestead.

Can you point to any documentation on this matter?

[Bryan Hancock]

Check this out Jon:

Subdividing Your Property

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A home sale exclusion applies to gain on the sale of a principal residence up to a set dollar limit. If you subdivide your property, selling off vacant land separately from the parcel on which the home is situated, you can claim the exclusion for the sale of the vacant land and the sale of the home provided they occur within 2 years of each other. However, only 1 exclusion amount applies to both sales.
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