$250,000. gift to purchase home. How do I report this income, and is it all taxable?

You dont report it. Gift taxes are the burden of the giver not the reciever. The tax rate is 50% on any ammount above $12,000. However there is an exemption on the gift taxes and that exception can come off one untifed credit that counts as a deduction off the exempted amounted on ones estate when the giver dies. But either way the giver must file the exise gift tax return and it must be claimed by the giver, not the reciever of the gift.