Read the sentence.

In most communities, drinking from the tap is perfectly safe.

Which of these correctly identifies the gerund phrase and its function in the sentence?

In most communities/object of the preposition

perfectly safe/direct object

drinking from the tap/subject

the tap is perfectly safe/subject compliment

It is relatively easy to spot a gerund, given that it looks like a verb + ing. Having that in mind, the gerund here is drinking from the tap. This gerund acts as the subject of the sentence, which you can easily determine by asking the question What is perfectly safe?, and the answer will be Drinking from the tap - that's how you know it is the subject.

So, the correct answer is drinking from the tap/subject.