Q: How do two siblings that sell a jointly owned investment property report the capital gains tax on the property and what documentation is needed for each of their tax returns?

Scenario: Two siblings who each file their own 1040 form own investment real estate together (sibling 1 Life Estate, Rem. sibling 2). When they sell the property they plan to split the proceeds 50-50. They are both in the 15% capital gains tax bracket, but sibling one is also subject to the 3.8% Medicare surtax.

How should they report the capital gains tax? Do each of them report their 50% of the proceeds and pay the capital gains based on the rate they owe (sibling 1 - 18.8%, sibling 2 - 15%)? If so, what documentation does each sibling need to submit to the IRS to show their portion of the gain?

If the above is incorrect, what is the correct method please?

Thank You!