I received a "right-of-way" payment. What options, if any, do I have for postponing tax payments on this?

received a "right-of-way" payment from a water and sewer line to be run through my farm. What options, if any, do I have for postponing tax payments on this? I was told I could add this payment to the basis of my property. Please advise as soon as possible. I could be looking at a $20,000 tax bill!

You may be lucky. The payment most likely will be treated as a tax-free return of capital.

You have a tax basis for your farm property consisting of its cost, plus the cost of any improvements, minus depreciation allowed or allowable for tax purposes and any deducted casualty losses. In general, when a property owner grants an easement over her property, which the "right of way" probably is, the payment received for the easement can be treated as a return of capital, which reduces the owner's basis for the property. For example, if the basis for your property is currently $300,000 and you received a $50,000 payment for the easement, the payment would be treated as a nontaxable return of capital, but your basis would have to be reduced to $250,000. This basis reduction would increase your gain or reduce your loss on a future sale of the property, but that is a future problem.

This answer assumes you retained all remaining rights in the land over which the rights were granted, so that the transaction will not be treated as a sale of the land. Retained rights could include rights to cross over the right of way and a reversion to you if the grantee abandons the right of way. Also, if the amount received exceeded your basis in the affected property, the excess is currently taxable, most likely as capital gain.