Honey, I want a new kitchen.  Okay, we'll move this house elsewhere and then build a new one.

Kind of a grey area, as pub 523 list address as one factor in determining "your main home". I believe I would treat it as a normal main home sale, but I would attach form 8275 

What would you put on the 8275?

How long did they own the parcel that the old house was moved to?

How long did the old house sit on this parcel?

They've got the owned and lived in the house for 2 out of 5 years part covered, but what about the land it was on when they sold it?

@sjrcpa I would put 26 US code 121. Home sale exclusion. schedule D, line # and amount. Then I would put the detailed explanation of the situation. After rereading the original post It probable isn't a section 121 unless he stayed at the NEW address at least 2 years, so I wouldn't need the 8275 😁  

I wouldn't play the egotist by waving an 8275 red flag to tell the world "I'm special."  This is no different from calling a mobile home a primary residence, for purposes of claiming the mortgage interested deduction.  In fact, you don't tell us that it's not a mobile home.  Or a houseboat, for that matter.  

But @sjrcpa 's question points to the right answer.  You have two transactions.  A sale of the structure, and a sale of the lot underneath it.  Exclusion applies to the former but not the latter.

Hello everyone, and thank you for the feedback. 

I apologize for not including more details but was trying to keep it simple. 

So, the house is a stick built house built over 50 years ago, new owners (family) have lived in it for just over five years. It is quite small and they want to expand but rather than tearing down the old house and throwing it away, they instead moved it to a new parcel purchased simply to provide a landing place for the old house, and then sold it. New construction (stick built) on former foundation, parcel. So, yes, the house sold without the underlying property. 

The house sold without the underlying property? They still own the new parcel they bought to provide a landing place?  Or did the buyers provide that parcel?  

New owners also own the new parcel which was bought by the former owners for a landing place for the old house which they moved.