Overall, I believe it would be in the best long term interest of all owners if you seeked professional help for "at least" your first year dealing with this. The fact that you're dealing with two states that tax personal income, along with the fact that it's being rented to a family member, and the fact that the family member is one of the owners of the property can really complicate things. Especially since only two of the three owners are reporting income from the property.
The formation of a legal partnership (or possibly a multi-member LLC if that's a better way to go tax-wise) would probably be called for here, to keep things straight on the legal and tax fronts.
