Thank you AmeliesUncle and MartinMarks1919. I did discuss with my accountant today and he was also of the opinion that we could be co-owners and not a partnership. My friend has his own accountant, so he will ask his accountant on Monday (she is off work recuperating from Covid until Mon). If she agrees partnership is not necessary, then I think we will probably go that route. If there is any doubt, we will then do the partnership.
We did see an attorney who drew up an agreement between us that clearly outlines all terms, including how title will be held, how the property will be used (rental only) and the right of first refusal to each other prior to putting on the open market. We have agreed in the agreement to use it as a rental for at least 2 yrs and then either party can request to sell their share after that time. I believe we covered all contingencies within the agreement, as the attorney was used to guide us through it.
I do not mind paying capital gains for tax year 2020 (minimal as the equity and thus the capital gain was halved, plus due to job loss my income was very low for 2020). And also do not mind recapturing half of the depreciation taken so far (also not that much since I originally purchased in July 2018).
Thanks again to everyone who is/has helped me through this. It sounds as if there are 2 ways to approach it.
