@savingdave99 wrote:
.....she decided to give me about $10K of the profits....
You will have to make the call in this situation, but it certainly appears to be a gift; she was under no obligation to compensate you in any amount and in any event but did so after the fact.
The Tax Court stated as follows in one case: “If a payment proceeds primarily from the incentive of anticipated benefit to the payor beyond the satisfaction which flows from the performance of a generous act, it is not a contribution or gift.”
