Fool breaks gift: musical instrument (7)
I believe the answer is:
bassoon
'musical instrument' is the definition.
(bassoon is a kind of musical instrument)
'fool breaks gift' is the wordplay.
'fool' becomes 'ass' (both can mean a stupid person).
'breaks' indicates putting letters inside (inserted letters break into the word).
'gift' becomes 'boon' (I've seen this before).
'ass' put within 'boon' is 'BASSOON'.
(Other definitions for bassoon that I've seen before include "So-so ban on the instruments" , "Tenor of the oboe family" , "wind player" , "Hollow instrument" , "Low wind instrument" .)