rbynaker
Level 13

The authority is actually in the Regs.  See 1.121-1(b)(3)(ii)(C):

https://www.law.cornell.edu/cfr/text/26/1.121-1

Assuming the combined gain is not over the limit, I would report the land sale and exclude the gain on the original 2020 tax return.  I would also attach a preparer note referencing the regulation above and indicate how much of the exclusion amount will be allocated to the 2021 sale.

Probably overkill, but I really love answering IRS inquiries with "as stated in the note attached to the tax return . . . <copy><paste>"

Rick