Faith, Transubstantiation, and cream of mushroom soup

Today, at Confession, I was challenged. Not to think of my sins, which came to mind far too easily. Not to confess them, though I was hesitant to say out loud how I'd failed God recently. No, my challenge came in the form of the penance.
The priest directed me: "Go, sit in front of the Eucharist [there was adoration going on outside the confessional] and think of three things that are good about you. Then, thank God for each one of them in turn, because they are gifts from him."
"This'll be quick," I thought. Saying a quick act of contrition, absolution from Father, and off I went to the pews. There I sat.
And sat. And sat some more. "I'm smart," I thought. Then I stopped and thanked God for the gift of wisdom and intelligence.
"Some people like how I lector at Mass," I then thought. Wait though...is that something that I am? Or something that I do? Certainly, speaking God's written word out loud is an action, but I'm using the gift God gave me to direct attention to his word. So, I guess I can thank God for that gift.
Then I was stuck. "I can tell a good joke sometimes." "I serve others." "I make enough money for my family to eat healthily and enjoy life." "I work hard."
The more I thought about it, I kept coming back to things I do, not necessarily what gifts I have. It got me thinking about Grace and Works.
I know that God loves me for who I am - and I hope and pray that I am filled with his Grace. And when I am filled with his Grace, I am happy to do his Works. But distinguishing between Grace and Works suddenly seemed much harder than it ever had been in the past. Where does one end and the other begin?
The Catechism teaches in section 2003: "Grace is first and foremost the gift of the Spirit who justifies and sanctifies us. But grace also includes the gifts that the Spirit grants us to associate us with his work, to enable us to collaborate in the salvation of others and in the growth of the Body of Christ, the Church. ..."
The growth of the Church is limited if the grace God gives through his divine providence goes un-used; remains un-exercised. So, the gifts that I have been given, which I use for the greater good of his Church, are simultaneously gifts from God to me (Grace) and gifts from me to God (Works).
Perhaps that's the only distinction that matters. Perhaps, the distinction doesn't matter. Both, and.
Whatever the right answer, I thank God for the gift of this penance though. Struggling to identify His gifts helped me to grow in my understanding of His love.