I can’t seem to find the answer to this. I know that it is far above the gift tax exemption($15k), so she would have to either pay gift tax on $115,000 or income tax on $130,000. All I can find via google search is that it would be taxable & now she is trying to give it back.
But she received the money in October, 2016, so she should have declared it on her 2016 tax return. So did she?