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TP owed a piece of investment land jointly with another person 50/50.   Bare land in the mountains.   Title was held by my client.   Sold this year for a small profit after taking into account the selling costs.   My client paid the other party their half of the net proceeds.   1099S is in my client's name.    How do I report to show the gain correctly?   

Option 1 - show client's share of Proceeds and Expenses on the sch D, and put a statement on the return that shows the Gross Sales Price and explains that TP is only 50% owner

Option 2 - Show full Proceeds & Expenses and then adjust Profit to my client's actual amount

Thanks in advance.

Tom
Modesto, CA

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