I am assuming that a 1065 partnership return is not being used here. Instead, each partner is reporting there percentage of ownership/income/expenses/depreciation on page 1 of SCH E of their individual 1040 tax returns. The program can not correctly handle a change of ownership percentage without jumping through hoops and swimming a raging river. Even then, things most likely won't be done correctly. The program (like all programs) has it's limits, and this scenario exceeds those limits.
Yes, you need to start a new schedule for your assets
This is not as simple as it sounds. Under no circumstances and with no exceptions should you change anything on any asset already listed in the Assets/Depreciation section. Doing so will skew the depreciation history and the current year depreciation will be wrong.
Depending on how things were initially set up by both of you for "percentage of ownership", changing that percentage may also skew the depreciation information.
I would highly (and I do mean "HIGHLY") advise both of you to seek professional help to establish a partnership that files a 1065-Multimember LLC/Partnership tax return. This will make both of your lives easier down the road; especially when you go to sell the property, or take on an additional partner or something like that.
If your state (or the state of either partner) taxes personal income, then I HIGHLY HIGHLY HIGHLY recommend you get professional help for dealing with this.
If you set up a partnership that files a 1065 for this property, then all costs involved can be claimed as a business/rental expense on the 1065.
