So while no one can predict with complete accuracy about how a court would rule, I have a hard time seeing how the Commonwealth can successfully tax the "option method" without amending the realty-transfer-tax statute. 2.

When someone moves out early and the other stays, we settle things at that time, by doing a property inspection and amending the lease to remove the name of the departing tenant.

Once you do this, it may or may not triggervtransfer taxes and you will need to amend your insurance policy to reflect the new insured name - your new entity.

if you allowed him to amend or change something already he's just trying the waters to see if he can squeeze a little more out of you. 

Do I have to amend 2015 taxes or can I just use the alternate method for the remaining 26.5 years?

You can always amend the lease agreement by introducing an amendment, where she pays you a set amount ever quarter or so, and if its more than it its your cost of doing business3.

I want to know how I go about asking for an extension, I've read some articles about amendments but don't know the process of adding one.

You gave a verbal permission which possibly amended the lease and you may not be able to rescind that permission. 

We will be landlords in about 10 days if all goes as planned.Question 1: Do you know if we can add an amendment to the rental agreement that is currently in place?

Many of the clauses in traditional CC&R's are no longer legal or binding unless they have been changed or amended.