Again........the casualty implications of this need to be researched.

The IRS will most likely attempt to style the payments to you as payments to get rid of a nuisance, and I think such are totally taxable income...........regardless of what you do with the cash.  (the reinvestment in farm buildings would still qualify for 168(k)........but no likely the payments for personal residence.)

So......it smells like to me that you need to make sure that the payments are definitely..........formally agreed to.........and all surrounding events supporting your position.....................for purchase/sale of OBJECTS, ie hard assets, and NOT for "compensation for non-medical damages" (which are taxable).

Therefore............coal company buying a house/property next door to it to get rid of a nuisance is common, just like farmer buying up the land/acreages around his confinement building..................AND as long as the object of the money moving is for the transfer of a personal residence, section 121 shelters the PROFIT of that sale up to 500K joint return/joint ownership.

Problem in selling a house----------what about the land under it?
Might have to be creative...........give the coal co a 25 yr lease on the ground, so they can be assured that no one builds there if you were to sell it, and you would have the right to farm it during that period.   Note of course, in order to make that valid/bonafide and withstand IRS scrutiny, it would have to be a totally legitimate, recorded situation.

The use of the funds from the sale of the residence is not any kind of an issue.

The sales price of the house...................AS LONG AS it withstands scrutiny from being a contrived amount, ie moving money from other taxable sources in what can be determined to be a multiple transaction.............is beside the point.   The price received can be 50 times the assessor's value, and not be a problem--------again, as long as it can be shown that the price allocated to one segment of a related transaction does not produce unwarranted tax benefits on another linked segment.

(I just made a seller of a tractor at auction yesterday a really happy camper by paying much more for his tractor than it was worth, just because I was tired of looking for one of that nature--------point, high prices can happen for a variety of reasons, totally unrelated to the object's "true value".)

The only problems with your transaction that I can offhand see are two ..................making sure that the documents needed to support the allocations of values between business buildings and personal building hold----both parties handle the same items the same way, for example .....................and making sure that you do not fall into the category for receiving taxable damages, and that is merely a research project.

Although new to you..........your type of transaction is not new to the tax world..............therefore research time will produce a route that can most likely be followed.

And..............I would most likely disclose the transactions (not together) in your return..........ie show the personal residence sale, just so you can have all your disclosure ducks lined up.