The sale of vacant land could be treated as a sale of your main home if:
The vacant land is adjacent to land containing your home,
You owned and used the vacant land as part of your main home,
The separate sale of your home satisfies the requirements for
exclusion and occurs within 2 years before or 2 years after the date of
the sale of the vacant land, and
The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land.
If these requirements are met, the sale of the home and the sale of
the vacant land are treated as one sale and only one maximum exclusion
can be applied to any gain. See Excluding the Gain , later.
Without the primary residence exclusion, the sale of real property will generally be capital gain. If this is the case you will have to allocate a portion of the original purchase price to the land and treat it as an asset sale. Tax records are a good source for determining the allocation ratio between land and improvements (your house). You can probably get the old tax assessment information by going to your county tax assessor's website. If it's not available online it will be available at the tax assessors office.
