You still haven't said how the property is titled. If the property were titled in a trust things might be different. If you are joint owners (and not tenants in common with different percentages), you each own the property equally. You don't have a choice on splitting it up. Tax law does not allow you to shift income to lower bracketed taxpayers after the fact.
In fact the closing agent is required to ask you about the split. So that each of you will get your own 1099-S. See <a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/i1099s.pdf">https://www.irs.gov/pub/irs-pdf/i1099s.pdf</a> page 3, "multiple transferors"
It says, among other things:
For multiple transferors of the same real estate, you must file a
separate Form 1099-S for each transferor. At or before closing,
you must request from the transferors an allocation of the gross
proceeds among the transferors. The request and the response
are not required to be in writing. You must make a reasonable
effort to contact all transferors of whom you have knowledge.
However, you may rely on the unchallenged response of any
transferor, and you need not make additional contacts with other
transferors after at least one complete allocation is received
(100% of gross proceeds, whether or not received in a single
response). If you receive the allocation, report gross proceeds
on each Form 1099-S accordingly.
You are not required to, but you may, report gross proceeds
in accordance with an allocation received after the closing date
but before the due date of Form 1099-S (without extensions).
However, you cannot report gross proceeds in accordance with
an allocation received on or after the due date of Form 1099-S
(without extensions).
If no gross proceeds are allocated to a transferor because no
allocation or an incomplete allocation is received, you must
report the total unallocated gross proceeds on the Form 1099-S
made for that transferor. If you do not receive any allocation or
you receive conflicting allocations, report on each transferor's
Form 1099-S the total unallocated gross proceeds.
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