How do I include the gift amount declared on Form 3520 in my 1040 tax return? can I just send the form 3520 by mail and file my 1040 tax return electronically?

You do not need to include the gift amount as income in your 1040 tax return. You will need to mail in Form 3520 and your 1040 together.

Thank you Dave. Can I file my tax return (1040) electronically and send form 3520 by mail?

No.  These would need to be mailed together. This is an IRS requirement.