@Then2 wrote:
Even though the lot was attached to personal residence nothing can be excluded?
It's not clear if you are talking about a separate lot that was separate when you bought it, or you subdivided the lot that contains your primary home.
If you subdivided the lot that your main home sits on, you can exclude the gain as long as you also sell your home within 2 years. And you just get one exclusion ($250,000 or $500,000 if filing jointly), you don't $250K on the lot and then another $250K on the primary home.
If this was always a separate lot, then whether or not the exclusion is allowed depends on whether you used the land "as part of your main home." If yes, then you can use the 2 year rule above. However, if you treated the property as a separate lot not part of the main home, then an exclusion is not allowed.
