Sale of rental property. 50/50 partnership between uncle and nephew. How can I allocate 50% cap gain in both?

[Terry53029]

Have they been filing a 1065 partnership return, or did they both just put rental on their 1040 schedule E

[Purvi322]

1040 Sch E

[Terry53029]

did they both have schedule E or was it put on one schedule E for one client

[Purvi322]

both

[Terry53029]

Then you just put 1/2 sale price on each of your clients schedule E asset entry worksheet

[BobKamman]

Were separate 1099-S forms issued to the two parties?  If the sale was reported to just one of them, you should anticipate and try to avoid problems with IRS matching.  

[Terry53029 · Accepted solution]

itonewbie, maybe you or Ironman can use your mind reading skills 

As you can see original poster is hard to get info from. Reading between lines, I doubt his clients received any professional advice about their venture. I'm thinking that one of them received a 1099 S, so what would be the best way to report to IRS. I'm thanking a letter with clients return that had the 1099 S explaining he is reporting half, and his nephew is reporting the other half. Hope you two guys will jump in 🙂 

[Purvi322]

Thank you for your help. They received 1099-s with SS # spot blank and both of their name was written on it. attaching statement will help. I will report  half on both. 

[Terry53029]

Glad to help 🙂