Don't waste your time with the issuer of the 1099-S. It's not wrong, and they're not going to correct that which is not wrong in the first place. Report the sale "as normal", declaring your partner's half of the proceeds as a sales expense. With your tax return due by July 15th, you *do* *not* have time to play games (that you will lose) with the issuer of the 1099-S.
