Will depend on the NJ Constitution but if it’s like most, the Executive (Governor) lacks the legal authority to make a new law or modify an existing one.

@Alejandro GarciaInspections, due diligence on the property, decide if you are leaving as is or adding square footage, invite GC's and or subs to come in and quote for work at the same time as inspections so you aren't being rude to the occupant and respecting their time, invite architects if you are modifying anything, also invite them if you are converting the garage into an ADU, if you are terrible and design, find someone who isn't, most GC's are so don't rely on their sense of design.

After the 30% federal tax credit (26% now) and the modified accelerated depreciation tax savings, the system cost me roughly $14,000 out of pocket (I bought the system wholesale and installed myself...I'm handy). 

So, I would write a simple letter stating that both parties agree to modify the existing lease to your new terms which sounds like a new termination date. 

You can modify the wording such that she is the primary tenant (ie if they break up, she stays not him). 

They simply net together.Whether the 20,000 loss is deductible depends on your income, and I can only assume that with a jumbo loan on your primary residence, you earn more than 150,000 modified adjusted gross income.

You can deduct real estate losses against W-2 income provided your modified adjusted gross income (MAGI) is under $150,000.

I believe the US Senate added HR 9395 (the bill to modify bonus depreciation back to 100% for 2023,2024 and 2025) as an amendment to the FAA reauthorization bill in the Senate. 

When you say joint venture, you mean modifying the lease terms with the tenant after the fact?

I understand that passive losses cannot reduce your taxable income and must be rolled over to be subtracted from future passive income, UNLESS you meet the special allowance that says you may deduct up to $25k in passive losses from taxable income if your modified AGI is less than $100k that year.