USA How to allocate Real Estate tax withholding in a divorce

[cafine5123]

Hello everyone, I am a first year tax accountant and i recently run into obstacle with a client's return. We have a client who was divorce in 2016 who is filing single in 2017. Him and his ex sold a second home in 2017. I received the 1099-S showing the the proceeds from the sale was split in half, lets say 500k each.

But i am looking at the sales documents which are under his name and it shows there is a 40k CA tax withholding was attributed to him.

I was thinking of having him claim the whole CA tax withholding and than pay off his wife share of the withholding with from his refund. But i am concern when wife reports her half of proceeds with no tax withhold, she will be hit with penalties and interest.

Any help would be appreciate on how to proceed.

 

[Drmdcpa]

Split the 593. In my software there is a box to recognize it is from the spouse when filing separate.