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I did not understand what you mean by I did a 1099 from a rental property? Did you buy this property via 1031 exchange from sale of your rental property?
Have you owned and used the property(including the adjacent vacant land) for your primary residence purposes?
When did you sell the portion before and not pay any capital gains? Was that gain excluded as you used the property as your primary residence?
Normally to claim exclusion from capital gain you need to use the property as your primary residence. If you sell the property that you have owned and used for atleast 2 years than you can exclude gain of upto $250K ($500K if married filing jointly).
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
Yes, you will ge tthe exclusion but only if you sell your primary residence too as discussed in the earlier post. You cannot sell the land and claim exclusion of the capital gain on the sale of land unless you sell the primary residence too in the 2 year period thereafter. The same rules applied to the sale that you made earlier if the sale was of vacant land So the exclusion of gain on that sale may also be questionable should IRS examine it in detail.
See IRS regulations - Sec 121 para (3) in the link below -
You will have to allocate the cost of the land to the portion of the land you are selling. You cannot allocate the entire cost to the land since you will own part of the property after the sale.
Your gain will be the selling price minus selling expenses minus the prorated cost of the land and the improvements made thereon.
The gain will be long term and subject to tax upto a maximum of 15% and hence the maximum tax you will pay on the gain is 15%.