They have an obligation to their shareholders and now that the banks are sitting pretty with cash reserves they can afford to wait on a buyer now.

To what extent will the parties be free to carry on other businesses - while the joint venture subsists- if one party pulls outIs it intended that spouses/partners should also be shareholders, to allow for tax advantages from a broader split of dividends?

Buffett's "Berkshire Hathaway’s Letters to Shareholders" (available for free on Berkshire's website) is the most influential business book for me, covering everything from ethics, to the importance of people, to capital management... a monumental read, but I digress.  

Open a c-corp in Wyoming (for anonymity, also good for a partnership owning 50/50 as share holders)2.

This means that the business entity does not pay any income taxes on its net income, but instead, that income (or loss) is passed through to the owners or shareholders to be reported on their personal income tax returns.  

Here is a short list of why most CPAs suggest against it:- S-Corporations only have one class of stock and a very limited number and type of shareholders. - Contribution of property, sales or liquidation of shareholder interest in the S-Corp, and distributions of profits from S-Corporations all trigger taxable events. -  Depending on the level of involvement in the entity, certain shareholders may not qualify to deduct S-Corporation losses from other income sources. - S-Corporation assets do not receive a step-up in tax basis upon the death of a shareholder. - If you fail to comply with the requirements of being an S-Corporation, which requires the business to hold both initial and annual director and shareholder meetings, adopt and maintain bylaws, issue stock to all shareholders, and record any stock transfers, you can have your S-Corporation status revoked.https://engagecpas.com/blog/wh...

If they indeed will buy as an LLC, they will need to sign shareholder/subscription agreements outlining the share that each person will have in the LLC.

Finally, I could receive shareholder distributions from the S-Corp, thus severely limiting my tax liability from the rental property income.Is there any validity to this?

Says the company: "From the close of the first day of trading through today, Starbucks shareholders have enjoyed a total return of more than 19,000%."

If I buy $1,000 Dell stock, it doesn't make me the owner of Dell, it just makes me a shareholder.