Sold primary house in 03/2021, and then bought land in 05/2021, address assigned same month. Lived on the property in RV. Built a house on the property. Florida residence, when can we sell the property and avoid fed capital gains tax?
You cannot "avoid" capital gains tax. You're probably thinking of primary residence exclusion (Sec. 121 exclusion).
Sec. 121 allows excluding some of the gain (up to a limit of $250K, $500K for MFJ) if you used the property as your primary residence for at least 2 years in the five preceding the sale.
So if you bought the property in May 2021, and from that time until now you've used it as your primary residence - then you can sell it and qualify for exclusion of some of the gains, up to the limit.
To get the maximum capital gains exclusion allowed under Sec 121 from sale of your primary/principal residence you're required to have used the property as your primary residence for 24 months of the last 5 years (doesn't have to be consecutive months). You might qualify for partial exclusion with shorter duration.
When does the clock start in your case?
The IRS might argue that the clock starts when you move into the house you've built, not when you bought the land. Hard to find much on the topic, but an old issue of The Tax Adviser includes this quote regarding a similar case:
The IRS argued that the construction of a new residence on the same property as the original residence disqualified the sale from the exclusion. It noted that Sec. 121 does not define the terms “property” or “principal residence.” The IRS’s argument stated that property means, or at least includes, a dwelling. In this case the taxpayers did not occupy the dwelling itself for at least two years within the last five years ending on the date of sale.
Because Sec. 121 does not define “property” or “principal residence,” the court was forced to look at the ordinary meaning of the terms and to legislative history to determine Congress’s intent. The court ultimately held that Congress intended “principal residence” to refer to the primary dwelling or home occupied by the taxpayers as their residence. While the court agreed that a principal residence does include the property and land surrounding the dwelling, the intention of Sec. 121 was that the exclusion applies only if the dwelling sold was actually used as the principal residence for the time period required by Sec. 121(a).
An argument could be made for 2 years from when you moved into the RV on the land as the exclusion can be used for boats/RV's if used as primary residence (would likely involve sale of the RV), but I would target the 2 years of living in the new house just to reduce risk of having to argue with the IRS. Consulting with a tax attorney could be worthwhile if you're needing to sell before you hit the 2 year mark in the constructed house.