Who is on the deed does not matter for tax purposes. What matters is the tax form being sent to the IRS.
No, you don't have to report it on your income tax return if the 1099-S form was issued to the other person with their Social Security Number and it was for 100% of the proceeds.
If you receive a Form 1099-S for amounts that actually belong to another person or entity, you are considered a nominee recipient.
You should file a Form 1099-S with the IRS (the same type of Form 1099 you received). File the new Form 1099-S with Form 1096 (this is a transmittal for the 1099-S) by mailing to the Internal Revenue Service Center for your area.
- On the new Form 1099-S, list yourself as the payer and the other owners, as the recipients.
- On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099-S to show the amount for each owner.
- The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: Click here to order forms or publications from the IRS.
- In TurboTax, enter the proceeds and cost basis as the same amount which will result in zero capital gains. See Where do I enter Form 1099-S?
- For additional information see TurboTaxDianeW's answer here.
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