I have friends dealing with a health crisis which requires abundant cash needs. They have built a home and lived there 2+ years, and have additionally split the parcel for 3 additional lots.
From my initial understanding of the capital gains exclusion on primary residence;
your $500k married exemption could include the gains from land which originally included the parcel of the primary residence, thus if you made 200K gain on the primary home and $100k on each of 3 adjacent and originally adjoining acreage you could collect the whole $500k, and anything over would be taxed as LTCG. I know there have some changes subsequent to original implementation. I believe they plugged the hole that allowed you to sell off $500k parcels from your primary residence land every 2 yrs, in that you now must sell your primary residence itself, not just the 'lower 40'.
Any other interpretations? or directions to information (accountant, of course... but they are not too creative...
... needing to stay out of jail to do their job...) There is a lot of room for interpretations.
I was always fond of the "multiple birth" exemption, which allowed you the same benefit as moving 40 miles for employment, in that you don't have to satisfy the 2 yr holding, BUT... you cannot get more than $500k tax free in 2 yr period, regardless of excuses