It sounds like your tenant is willing to forfeit the deposit.

If they break the lease and fail to pay the termination fee, include a clause that says they automatically forfeit the deposit towards the termination fee.

I had planned on doing the full remodel on that property for $20k(the companies cost for doing the Reno with no profit) for our venture and then forfeiting all of my profits on the back end and allowing you to make 100% of the profits once the property sold.

You have to hold her responsible and say over and over again that SHE will be kicked out for letting him in and forfeit her deposit.

If your lease specifically states they forfeit the deposit, then you can keep it.

It also specifies that an unresolved breach automatically forfeits the security deposit, which can no longer be held to offset damages once a notice to vacate has been issued for the breach. 

If however (also state in the letter) the prospect declines taking possession at the time the property is ready, they forfeit the option payment they made. 

As the business owner you have a choice. you can shut down for a week forfeit a weeks revenue and send your widget machine in for an upgrade so it can produce 150 widgets a day, or you can get a loan for the bank in an amount equivalent to one weeks revenue and purchase a second widget machine to increase production.Which do you choose?

It’s standard and understood that if you end a lease early that you lose your security deposit correct?

When that same tenant moves out one year later and forfeits that security deposit, how should I do the accounting?