It was in the development part of the settings -_-
So after having that enabled go to the market and download the app called Bluetooth GPS.
Then on your phone download the app called GPS 2 Bluetooth v.2.2. This app simply makes other devices think your phone is an external Bluetooth GPS receiver.
Its a widget so add it to your home screen and enable it so it looks like this.
Then pair your tablet with your phone and launch the app on your tablet and select your phone from the drop down menu and click connect.
Then **** your pants cause yeah would you look at that GPS yeah would you look at that GPS yeah would you look at that GPS it it it works out! ;D
Simplified written instructions thanks to Hyflex:
Step 1) Open Market and/or Instal: GPS 2 Bluetooth
Step 2) If you do don't see the widget then reboot your phone.
Step 3) Turn on GPS
Step 4) Turn on your widget (press it)
Step 5) Turn on Bluetooth and pair with your transformer prime.
Step 1) Open Settings
Step 2) Open Developer Options
Step 3) Enable "Allow Mock Locations" & Enable "USB Debugging"
Step 4) Open Market and/or Instal: Bluetooth GPS
Step 5) Turn on Bluetooth and pair with your android phone
Step 6) Open Bluetooth GPS
Step 7) Activate/Enable "Enable Mock GPS Provider"
Step 8) Press Connect.
Oh and has anyone else used Photoshop touch its freaking AMAZING!