Lorenelady

@Dashinka nailed it. 
 
Whatever your stepdaughter does, she must NOT get married before she enters the US and activates her LPR status. 
 
As an aside, 18/20 years old is still pretty young and a lot can change. Best for your stepdaughter to activate her green card, get used to life in the US, get a stable job of her own, and THEN if she still wants to petition the guy, she can get married and file for him herself.

Fiancé visas are not an option for LPRs, so the only option is to get married after she becomes an LPR and file the I130 for her spouse under the F2A category.  Good thing is F2A is Current, so only normal processing times (USCIS/NVC/consulate) which I believe is around. 24 months.
 
Good Luck!

And understand the IR 1 will take 2 or more years so she could be back in India
that would mean a Canadian police report would be needed before she leaves for home

Yes.  You may request NVC for case transfer even before DQ.  Just need to submit a scan of your wife's valid student visa as proof of long-term residence in Canada.
 
Reminder to get your wife's Indian police certificate from the Regional Passport Office before she leaves India, in case she hasn't already done so.
 

and u need to get the letter from IRS and  state why no tax returns
 
 Verification of Non-filing Letter - states that the IRS has no record of a processed Form 1040-series tax return as of the date of the request.    

If you have income  why don’t you have a tax return or tax return  transcript?

That is odd (spanish water bill).  Dude must live near the Alamo.
 
Tax returns, bank statements, current paystubs usually do it?  Rare to hear about water bills and drivers licenses stapled to an I864.

copy of signed lease on an apartment
or his name on a deed 
state auto insurance stub with US address 
 

New address is in Spanish ???
does he reside in the US?
Is tax return a US address?
 
Are u the USC or immigrant?
 
all documents need to be translated into English and both the spanish and english needed at interview 

I never heard of sending a joint sponsor’s drivers license in with an I864.

If you're intending living in the US for many more years, it makes sense naturalizing in most cases. You wouldn't have to deal with ridiculous processing times for GC renewals and USCIS in general.

Citizenship is less expensive in the long run.

Id be more concerned if it was a relative who could legitimately file an I130 .. which the uncle cant .. 

Makes sense: 5 years are applying on their own merits rather than their relationships = less stuff to consider and look into = faster approval.

I filed my taxes as single even after getting legally married abroad. I had no problem in USCIS or NVC stage. I got both approval and DQ. 

I researched this question last year and asked a tax accountant for advice.  The IRS considers adding a spouse to a deed as a gift, 50% of the market value of the house.  For situations where both spouses are US citizens, there is a very high lifetime maximum, $12.06 million for 2022, that is exempt from the gift tax, so unless your house is worth more than $24.12 million there is no gift tax to add a spouse to your deed.  However, if a US citizen adds a non-US citizen spouse to the deed, the gift tax exemption is only $164,000 in 2022.  So if your house is worth more than $328,000, there will be a gift tax, and you should ask a tax accountant for advice.  We decided not to add my husband to the deed on our house because it is worth much more than $328,000, and the tax liability would be in the thousands of dollars.  See below for more details from the IRS, form 709 instructions.
 
https://www.irs.gov/pub/irs-pdf/i709.pdf

Not why you call them.  

You call them because they file deeds after closing and know exactly what the process is to do it.

Its already paid off. No mortgage. 

Have a lawyer file a quitclaim deed with the county putting your wifes name on the house. really simple.

you will need an original for the interview in Lagos

I would try to get a new original.  A copy will not suffice unless it is a certified copy.  The original should not have been sent to USCIS.  Good luck.

By law, every visitor is assumed to have immigrant intent.  A spouse in the US is a strong tie to the US.

Yes, he needs to provide the arrest records and court documents along with the I-129F.
 
If you are so worried about this criminal record from decades ago, consider getting married and pursuing spouse visa instead.  Unlike the I-129F, the I-130 petition does not require the petitioner to disclose criminal records.
 

I don't think it's a problem,  the same thing happened to me. When I moved from AZ to NC, NC never took my Az Driver's license. I recently moved back home. Thinking I still had a AZ license but found out it was deactivated.

It's possible but not an actual requirement.  Really, purely optional.  Start by becoming an A-Student of the I-130 instructions.  Download from USCIS.gov
 
When you get to the part that mentions joint tax returns, note that it's part of a list that follows and sentence that begins with the words "In addition to the required....." meaning NOT required.  Most couples who have not yet lived together don't have joint tax returns or joint bank accounts yet, and are NOT expected to have them.  Concentrate on evidence of time spent together in person, like passport stamps and boarding passes etc. showing you were in the same place or traveled together.