Here are the IRS guidelines on which types of settlements are taxable: https://www.irs.gov/pub/irs-pdf/p4345.pdf
Gifting part or all of a settlement does not affect its taxability.
The IRS gift exclusion amount for 2018 is $15,000. Gifts of $15,000 or less do not require filing of a gift tax return.
Gifts are not deductible by the donor, nor are they taxable to the recipient.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
