Capitol gains question

[Mike Reynolds]

I have read some on capitol gains but the info I find is for married people not partnerships. Here is my particular situation. Myself and a friend want to build a spec house and we basically have a buyer lined up. We both have had success on our own with rent property. He is an electrician and I am a builder. We will build the house on our own and our projected profit will be 25k. We will pay ourselves as we build it so that will be taxed as income of course. But the capitol gains has me confused.

Will I have to pay capitol gains on the entire 12.5k or will I be able to use the 250k deduction? Also, if we reinvest it back before years end how would the capitol gains tax work for that?