Here's an update. My wife uses a CPA to do her (more complex) tax return. The method he used to properly allocate our split share of the home-sale proceeds is much simpler, and more reasonable than dividing everything by two just to make TurboTax do the right thing.
The simple answer: add your spouse's share of the proceeds to the selling expense.
That allows reporting a selling price that matches the 1099-S, as well as using the actual adjusted basis of the home sold. I manually did this in the TurboTax Home Sale worksheet, and it works!
Now Intuit... use this for your step-by-step procedure!
