We own several acres of property which is currently our homestead. It includes wildlife exempted property and then a portion of the land includes our main home & barn.
We have decided to sell a portion of our wildlife exempted property and were curious if it would qualify for the exclusion of gain under publication 523.
The land has been considered our homestead and we have lived on it for 2+ years and we are married filing jointly... so we definitely meet the eligibility test, however we are not Selling all of our property or our residence.
In this case, does the property we are selling become "vacant land" at the time of the sell, in which case it sounds like we would need to pay capital gains or if we use the sell of the land to pay off the mortgage on our main house would it not apply since technically we are putting the "gain" back into property?
Any insight would be super helpful. Thanks in advance.
