Its like the guy who charges 10k to join and you have to split profits up to 500k.. all people focus on is the 500k and the 250k they are going to make which of course is rare to the extreme. the guru makes his money on the 10k and could care less about the trailing income.

But it is a conversion from one rental to primaryOther alternatives to achieve the basis transfer would be to sell both and buy a new one but that would trigger income taxes and sales expenses that may be more than the tax savings from basis carryover. 

Any advice on landlord friendly state with good rental income?

Duplexes are not passive income, and one major repair will eat your entire year's cashflow. 

Passive- Which is more passive? 

Great for low-income rentals if bought super cheap.Years ago I was repairing sewer lines for the county and a sheriff's deputy pulled up and told me and my crew to be gone before the sun went down, because they probably wouldn't come back.

You need to talk to CPA first regarding to the income tax, gifted tax or capital gain issues.  

I think I am after the golden 10k/mo net income from real estate.  

There is no statutory requirement for rental income.3.

In central Alabama the following areas are good.Hoover, Pelham, Calera, Alabaster, Helena, McCalla, Gardendale , Trussville just to name a few.More affordable low income areas will include Centerpoint, Pinson, Hueytown, Pleasant Grove, Ensley.