。
She wrapped the gift in paper.
Literal
She [topic-は] gift [object-を] paper [in-に] wrapped.
Two grammar points worth flagging. 贈り物 ('gift') is the lexicalized noun form of 贈る ('to give a gift'), more compact than the relative-clause variant 贈るもの ('thing to give'). The 紙に — paper marked with に rather than the alternative で — frames the paper as the destination of the wrapping ('wrap the gift into the paper') rather than the means ('wrap the gift with paper'). Both 紙に包む and 紙で包む are natural Japanese; the choice depends on whether the speaker is foregrounding the act of enclosure or the tool used.