Vesting: Once the acquisition is completed, everything has to be vested in the name of both owners, (i.e. the utilities, agreements, etc.), else it can be considered as benefiting one over the other.Income has to be divided up-front, i.e. cannot be deposited in one account and then split from there (this is where a property manager will help as the rent can be collected by them on behalf of the owners).Not familiar with a custodian form 490T, would you please elaborate?

As far as your structure, it would be better to have the two investors enter into an LLC as a partnership, with their own operating agreement done up by an attorney.

LegallyIt's easy to change rental agreement terms with month-to-month contracts.

I would contact a good tax attorney at this point so that they can review everything that you have, including agreements with the silent partner, how the actual reporting was carried out, etc., in order to determine how to best answer your end questions above. 

I have come to an agreement on a house purchase with a seller.  

That's how I got started (1978).The legal information that you to study is primarily found in CA Civil Code Section 1695 as it relates to Equity Purchase Agreements.Also, study CC 2924(a) et seq. as these are the laws pertaining to non-judicial Foreclosures.I believe you can still download a copy of the Equity Purchase Agreement which includes the statutory 14 point type font language at Ward Hanigan's Foreclosure Forum website.I still think the most successful people who are looking for super-bargains (meaning properties with lots of existing or created equity will do their best work by a combination of mailing, calling and knocking as owners are getting pounded by direct mail pieces.

They then can sell that loan right away to Fannie/Freddie or any other investor they have business with and get $205,000 or whatever the agreement is.

Depending on the state, and I don't know Colorado, the seller may have to sign a cancellation agreement.  

Keep in mind you can change the lease agreement as long as the tenant agrees, even if you are only three months into it. 

Commercial projects often utilize AIA agreements and new home projects, may differ too.