It sounds like what you were calling a "Co-Signer" was actually a Co-Owner? If he was truly a co-signer the transaction likely would not have been in his name at all.

4797 is for Business Assets (and Rental's Etc.) not personal use property.

The Transaction should be reported on Schedule D - use the 1099-B input.

I don't believe that any of the loss should be deductible as the property was Personal Use Property.