Capital gain tax liability of a lot subdivision

[xijingz]

We bought a house in 2019 and lived there since then. This house locates on a piece of land of 1.5 acres. We want to subdivide this lot into three parallel lots and our house is on one of the end lots. The middle lot will share a boundary with our house lot but the other end lot won't. We know we can be exempt from capital gain tax up to 500k if we live here for 2 years and sell the house.  The profit of selling an adjacent lot to the primary residence is also eligible for this tax exemption as long as the lot sales are within one year of the house sale. But when we finish the lot subdivision, will both the middle lot and the other end lot be considered as adjacent lots from our house? If so, if we sell the middle lot first, will the other end lot automatically be excluded from an adjacent lot so that causes capital gain tax. 

Thanks a lot.

[mellish7777]

If you subdivide into 3 lots first the end lot will not be adjacent to the lot that your home is located on. The time period is not 1 year but 2 years before OR after the sale or exchange. Still you can only exclude vacant land that is ADJACENT to the land on which your main home sits. Talk to a TAX PRO because there are other options you can explore for the sale of the 3rd lot.