Basically what you did for your friend in the past was a gift. Now, they are choosing to reciprocate with what the IRS considers the same exact thing - a gift.
Gifts are not taxable or reportable on any tax return, ever. However, if the gift given in any one tax year exceeds $15K then the giver of the gift is required to file IRS Form 709 Gift Tax Return. The recipient of said gift is not required to file or report anything, to anyone.
So the trick here is for your friend to not give you more than $14,000 in any one tax year. This should be simple to work out since they want to give you this gift in installments.
Now the 709-Gift Tax Return is actually a very misleading name for that form. If your friend gives you more than $14,000 in a tax year, they the giver has to file that form with the IRS. However, that form has nothing what-so-ever to do with taxes and it will not result in any taxes being paid on the money by anyone. Here's the reason the form is required if the gift is more than $14K in any one tax year.
When a person dies and leaves their estate (property, money, cars, etc) to their heirs, any one heir that receives more than $5.2M (five million two hundred thousand dollars) as an inheritance, has to pay "Death tax" on the amount over $5.2M. Gifts given in any one tax year that are valued at more than $14K count against that $5.2M inheritance ceiling. So the only reason the giver of the gift has to file the 709 - Gift Tax Return, is to report the amount given so that amount is subtracted from the $5.2M ceiling that neither giver or recipient have to report on any tax return.
For the IRS Form 709 - Gift Tax Return, TurboTax does not provide this form. It's the responsibility of the gift giver to download the form at https://www.irs.gov/pub/irs-pdf/f709.pdf then fill it out, sign it, and mail it to the IRS at the address on the form. But again, no taxes are paid at that time, or at any time ever, by either the giver or the recipient of the gift.
