They do not speak to any income taxes, or penalties that you may incur.As Jaime recommends find an ERISA attorney like Matt Sorenson or Frank Bridges to assist you through unraveling your situation.

I'm not going to spend time trying to unravel it or teach anyone anything.

If you had milestones, and at the first sign that a milestone would be missed either by date or performance, you can fire right then and there and square up based on work completed, not whether or not he has an agreement signed by you that sets specific amounts owed at discretion controlled by him.If the contractor is good at being a grifter by virtue of his contract and non-performance, then he has every right to go straight to the county recorder and file a mechanic's lien, get a stop work issued until full payment has been recieved...you can't put another worker on site until that is resolved...see how this could unravel on you.

I don't use a real estate lawyer for these things, I use a corporate lawyer who is experienced and both putting business deals together and unraveling them when they go wrong. 

There is no tax benefit to be gained from forming an LLC or putting the property into a trust.You will need an experienced and licensed tax advisor to determine your tax liability under each of your exit stratgies and to unravel the tax impact of correcting your depreciation basis.  

@David Dachtera in Orygun developers license has been around for decades.selling RE without a license is front and center .. because of complaints of various kinds.Sub too rental skimming being a big one.foreclosure bail out fraudsAnd wholesalers tying up properties not closing and seller relies on the fact that they have a closing coming up they box up all their stuff  they put NOn refunable EM on the new place only to have it all unravel as the wholesaler can't close and walks..

That's half the battle, now only to execute the plan and make sure you have a back up plan or two if the original game plan comes unraveled?

Unless these are unraveled all of this window dressing won't matter.  

I just unraveled the mystery of real estate!!

@Sarah PresentNot that I'm disagreeing with @Mitch Messer but even if you have no lease at all there are undoubtedly tenancy laws in CO that you would fall back on should your verbal agreement unravel.