When you and your sister get the property in your names, you you can do a cost segregation on it to reduce your tax liability and that will help offset some of what you have to pay sister #3. 

See if you can get investors to utilize your energy and time to find them deals, hell they might even pay you for that.

or if I can let the local FD use it as a training/test burn to reduce the amount of debris that would need to be hauled off to the landfill.  

Each should reduce costs on the property and add value for our tenants.

May be a way to move all Schedule E income into a new LLC (partnership with spouse) and then pay CA state tax from that entity and then deduct that against the rental income, thereby reducing the pass through rental income from LLC into federal returns?

If not, I wouldn't invest the time and energy to get your license.....UNLESS, you plan on doing many deals/year. 

Do I go back and adjust these amounts (restating my income statement) or do I just make an adjustment in November for the $1,000, basically debit property tax payable (reduce a liability) and credit WHAT? 

@Jerel Ehlert i am currently a project manager working for a good energy company and have been herding squirrels for the past five years lol I do work a lot with job site construction Managers plus our civil and electrical crews onsite in addition to coordinating between our engineering teams and customers.

I know I am going to word this improperly but is it possible to wrap the new purchase and the older property on the same mortgage and use the equity to reduce the down payment of the new purchase?

And, as you continue to buy more properties and form more entities to segregate your assets, you may decide to form a parent holding company to reduce tax preparation fees, ease administration, and add an additional layer of asset protection between your properties and you personally (shown as HoldCo, LLC in the sample organizational chart).As for which form of entity to use, it can be state specific, so you should seek advice from an attorney practicing in your state.