Home Sale Exclusion

[Sally]

I have a client who originally purchased a house on 5 acres of land. She later bought adjoining land (20 acres) to raise horses for pleasure. She then added an 80 acre parcel that was in the same close vicinity of his house, but not adjoining. She has owned and lived on the property for more than 10 years. She has an offer to sell everything. Can she use the home sale exclusion on all of her property or only on the original house and 5 acres?

[Ned]

Land

The land has to be adjacent to the land that your house is located on in order to be included in the exclusion. Land that is close but not adjacent won't count. The sale of the house and adjacent land are combined when figuring your exclusion.