capital gains vs straight income q

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Hello Everybody,

I'm new to the whole REI stuff and wanna run a scenario by you.

Im considering purchasing 40 acres of land, the land has approx 700 ft of frontage so ideally I'd like to sever 3 seperate lots. I understand that if I build a house and use it for my primary residence (even for a short while) then I am exempt from paying capital gains tax when I sell the house.

Now, what if I sold the other two lots? Would that be considered a capital gain, or a business income? Or what if, after I've sold the house built, I built another one beside it, lived there then sold again... would I be liable for paying tax in this case?

What I'm trying to get at is, what is the best way to profit from the property without losing $$$ to the taxman?