What is the step by step process of upgrading B2 visitor visa into HB1 visa?

It is currently taking about 10-12 years for a sibling of a US citizen to qualify for a visa. If your nephew is the son of your sister, is a US citizen and is over the age of 21, then it would be considerably faster for him to petition for his mother/your sister (9-12 months).

Unless you are sitting across the table with an immigration attorney who must have your documents and because, issues such as you have presented are best dealt with on a case by case basis, I do not believe anyone can offer a step-by-step advice. You should consult with an attorney and make sure the attorney has all necessary background information about your case.

The process is complicated enough to befuddle most attorneys who do immigration cases between divorces and real estate closings. Giving you step-by-step instructions would be a waste of time because you do not have the training necessary to follow them effectively. Besides, knowing exactly what and how to do, step by step, is the core of the legal profession; and I don't see why changing a visitor's visa into a working one should be a charity case. Chances of success of your application will depend on a) merits of your case; b) skill of your attorney; and c) the timing (the application should be submitted to USCIS on April 1, or as soon after that as you can manage) So, first, you need to secure a qualified job offer (if you don't have one yet) from an employer that is willing to sponsor you for an H1B. Second, as soon as you get the job offer, find an immigration attorney willing to take your case. The rest should be easy.

B-2 Change of Status (COS) to H-1B requires filing of H petition on your behalf by a US employer willing to sponsor you for such a work-authorized visa classification (not a simple process since receipt of a LCA - labor condition application - from DOL and other factors are required steps prior to filing of H). Currently there are no H visa slots available until the new 2014 FY allocation which begins on April 1st of this year (for H employment authorized as of October 1, 2013, at earliest). You should consult with an experienced business immigration attorney to guide you and the potential employer sponsor through the process as soon as possible since, optimally, filing should take place on your behalf on April 1st of this year for greatest probability of successful outcome due to pent-up demand for the newly available visa slots which are about to open up. With a US master's degree you would be in a preferred position to receive one of the 20,000 available slots which will be open as of April 1st for those potential beneficiaries possessing at least a US master's degree. Rate of success is usually high if handled properly.