Do Schedule E as you normally would. Indicate a total disposition. Show each asset sold as of the date of sale, but DO NOT show a sales price. This should take care of properly reporting the passive loss and clear any PAL carryover. 

Using the depreciation Schedule create the 4797 through the Schedule D input, reporting 50% of the sale price. Show the other 50% of sale as an code N or O on the 8949.  Alternatively show 100% sales price on 4797 and adjust basis to make the gain the appropriate 50%. Either way I would attach statement explain the situation and indicate the name and SSN of the other "partner".

I imagine some other user might have even better suggestions to report this nonconforming partnership sale