Or probably even if they are not separated. RR 59-229:
The final consideration, in an exchange of the instant type, is the tax treatment of residences (with mortgages thereon) which are exchanged with the farm properties. If these residences were occupied by tenants acting, for example, in the capacity of caretakers or farm workers for the taxpayers, such exchange would be treated under section 1031(a) of the Code as "property used in trade or business" in the some manner as the exchange of the farm lands and buildings. However, where the dwellings are used as personal residences by the taxpayers who are parties to the exchange, an exchange thereof is treated as a separate transaction. Any restating gain is subject to the provisions of section 1034, pertaining to the sale or exchange of a residence. Any loss on the exchange of a personal residence is recognized under section 1002 of the Code, but is not deductible in computing net income, as provided in section 262 of the Code. In such case, the basis of the residence received upon the exchange is its fair market value on the date of the exchange.
An exchange of personal residences along with farm lands, buildings, and crops is treated as a separate exchange governed by the applicable provisions of section 1034 of the Code for gain, and by section 262 of the Code for loss.
RR 68-331:
Accordingly, the exchange by the taxpayer of his leasehold interest in a producing oil lease (not including personal property, stock in trade, or other property held primarily for sale), extending until the exhaustion of the deposit, that is held for productive use in trade or business or for investment, for the fee interest in the improved ranch to be held for productive use in trade or business or for investment is an exchange of property for property of a like kind under section 1031(a) of the Code, to the extent of the ranch land and permanent improvements thereon, but not including that part of the ranch property consisting of a personal residence within the meaning of section 1034 of the Code, personal property, stock in trade, or other property held primarily for sale.
