Can I deduct cash I give to my children from my AGI?(A friend was advised to give his children cash in order to improve his tax situation.)

Gifts that you make are never tax deductible. If you have rental income, you must pay tax on it. Whatever you do with the money afterward has no effect on the tax you pay.

If you gave the property to the children, then the rental income would be taxable income in the children‘s name. But there are significant legal and tax implications with this, and you should get competent, professional tax advice. I don’t think your friend is getting advice from the right people.

gifts are tax free for both the donor and donee but must be reported on form 709 if in one year you gift a person  $17,000 or more. as for deducting a gift, sorry that's not allowed.  

you could gift the property to your children but that may require involving a lawyer if they are minors. But, under the tax rules if they are under 18 and their net income from the rental and other investment income is over $2500 they get taxed based on their parents' income tax rates (kiddie tax)

depending on how old they are, if they perform services for the rental property you could pay them a fair salary which would be deductible to you but taxable to them. you would also have to file payroll tax returns and, depending on their age, pay FICA and Medicare taxes on the wages. Maybe unemployment compensation taxes s well

we don't know your friend's tax situation but the same gift rules applies to him. The idea behind gifting is to move income earning assets like cash from one person to another who hopefully can earn income that isn't subject to taxes at or higher than the donor.  Also, it may serve some estate planning purpose but then your friend would have to be a multimillionaire more than 12 times over.