Capital Gains when developing for extra units on primary residence - seeking advice

[Susanne Stauffer]

I own a home - my primary residence- in Seattle and plan on developing the back portion into couple/several units.  I will be able to subdivide the lot - back units will be condominiumized.   I will either sell all the back units or sell portion and keep portion as a rental.  I have lived in my home a long time and thinking about how the current capital gains exclusion would work in this case, when Igo to sell, five years from now - kids going to highschool so no-go for moving to smaller unit in back.)  Pay tax on the new units that I sell and keep  the $250K exclusion for the original house (but now the lot is smaller?)?    I understand tax advice is specific to individuals/timing/location/situation and I need to hire a CPA -  but in general how would this be done? Have you done this? Thanks all!