Estate Finance Family Tax Plan Question

In the scenario presented for the assignment, assume Mr. Brady provides you with the following additional information:

In 2009, Peter Brady was struggling with cocaine addiction. On February 1, 2009, Mr. Brady and Peter entered into a written agreement where Mr. Brady agreed to pay Peter $100,000 on February 1, 2019 if Peter is able to pass a drug test every month for ten years. On February 1, 2019, Peter passes his final drug test (he had passed all of his other drug tests too) and Mr. Brady transfers $100,000 to him. Assume for the purposes of this question that the agreement between Peter and Mr. Brady is legally binding (there are many reasons why it might not be legally binding, but just assume that it is).

Based on the information above, please answer the following questions:

• What are the gift tax implications of this transfer?
• Has Mr. Brady made a gift? Why or why not?
• What code sections or regulations might be applicable here?