Do I have to pay taxes on the 1099-B if it was a gift?

My son received a college fund from his grandparents.  When he started taking distributions on it, they sent out a 1099-B.   One of the Turbo tax questions was is this gifted, I answered yes and it didn't make him pay.  Last year, he had to pay out due to the 1099-B.  Is this right?  He shouldn't have to pay taxes on it because it was a gift from my parents.  If so I need to go admend his 2018 taxes to get back that money