He avoided "subdivision" law by breaking off lots every 5 years and gifting them to kids/wife etc.

Once september approaches you see a significant slow down, and by the middle of November (I call this the pre christmas spending. everyone is buying christmas gifts and don't have money for security deposit and 1st month's rent).    

I know abut the gift tax, but if he does not report taxes in the US, why would he pay any for this gift right?

This is my first time doing a cash out refinance on a property that was gifted to me after I graduated from undergrad. 

The house with a view also has a pool table and hot tub, but that's standard for the area.I'm not providing anything consumable like gift baskets or event tickets or anything like that.

You are married so no gift tax.The tax code exclusion on gain on sale of primary residence is a two prong test.

I'm sure that your friends at BP will want to get you a wedding gift!

In my opinion they best gift you can provide is being a good landlord.

Hopefully you do have a mortgage or deed of trust (which ever is used in your area) filed at the county courthouse showing your loan.If they declare bankruptcy it can affect your ability to recover your money.Are you willing to consider the $110K a gift?

We all have our "gifts" for some of us our degrees are just theoretical extension others it's not!