So let's apply some common sense here.  Mother-in-law wins the recent billion dollar lottery.  We all agree lottery proceeds are unearned income.  Does it make any sense that she can be claimed as someone's dependent?  Of course not.

Gross income means gross income.  It is defined in Publication 501 in the section devoted to a qualifying relative.  It explains that a qualifying relative must have gross income less than $4400.  Since $100000 of mother-in-law's income is greater than $4400, it is clear that she fails the gross income test and cannot be a dependent.