"I would reduce net cash received by the amount paid to Person B (the client issued a separate 1099-S for that)?"

That implies your client sold to Person B.

This is the operative statement: "He had another investor (person B) in the property"

Why? What is "investor" for this property? Lender? Partner? Co-owner? Because right now, it isn't clear if this is a Cost of the sale, or a pay-off of debt, or a share of profit, or a bunch of other things yet to be determined.