You're overcomplicating this. Think of the gift as money. They gave her the money, in essence.

Yes, the sale is $450k.

FMV of the real estate minus the debt against it is her equity. She didn't fund that difference; someone gave her a gift "of equity."

Start here:

https://www.rocketmortgage.com/learn/gift-of-equity

https://www.irs.gov/instructions/i709

And it helps to state which Program you are using: ProSeries, ProConnect or Lacerte?

For example, you can google:

proseries 709