capital gains

for my divorce settlement i'm to receive 23 ac from our 28 ac. farm. my ex will be keeping the house and 5 ac which has been our principal residence in pa. for 17 years. he will be transfering the 23 ac ( and the capital gain) to me and i'm selling 20 ac and keeping 3 ac to build a house on. my question is after i figure the ajusted base price can i also offset it by the constuction price of the new house or can i take the one time excl. for a single person since it was my principal residence or is ther another way to offset the large capital gains i will have.

Unfortunately, the farm acreage that you are going to sell, is not qualified as your principal residence under the rule that if the property is your principal residence and a business, such as a farm, you must treat the sale of the part used as the farm as a sale of business property, not as a sale of your principal residence.

The construction price of the new house will be added to your basis of the land. It is not set off against the gain from the sale.

Unless you have capital losses from some other transaction, I can see no way to offset the capital gains from the sale under the facts that you have given.

However, since you are expecting a large gain and a large tax bill, it might be a good idea to have a CPA or other tax professional try and do some tax planning for you before you make the sale. A professional, who can see your entire situation, may be able to save you some money.