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

Purvi322
Level 2
 
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Terry53029
Level 14
Level 14

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 🙂 

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9 Comments 9
Terry53029
Level 14
Level 14

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

Purvi322
Level 2

1040 Sch E

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Terry53029
Level 14
Level 14

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

Purvi322
Level 2

both

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Terry53029
Level 14
Level 14

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

BobKamman
Level 15

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
Level 14
Level 14

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
Level 2

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. 

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Terry53029
Level 14
Level 14

Glad to help 🙂

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