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A gift is defined as - a voluntary transfer of property from one person or entity to another made without charge or consideration. - http://www.lectlaw.com/def/g007.htm
Because your brother plan to pay that amount off - it is not a gift - but most likely a loan.
Because there is no any interest charged - the implied interest would be considered a gift - but the principal of $150,000 is not a gift but it is a loan.
As a recipient of a gift - you do not need to claim it as income. Regardless of the value of the gift. Please see for reference IRS publication 525 page 33 - http://www.irs.gov/pub/irs-pdf/p525.pdf
The donor - might be required to file a gift tax returns if the gift amount is above $13,000 per person per year (for 2010).
There will not be any gift tax unless lifetime limit of $1,000,000 is reached.
Let me know if you need any help.
If it would be considered a loan, then what kind of taxes, if any, would have to be paid, and by which party. My cousin gives me a gift - no taxes for me, and my cousin may have to file, but no taxes for him, either on a 150,000 amount - correct?
Then my brother, who has nothing to do with my gift transaction, wants to give a gift to my cousin's wife - would it be treated as above?
If that is a loan - it is not a taxable income for you as a recipient and not a taxable income for a creditor when it is paid back.
You are correct -
-- the gift is not a taxable income for you as a recipient;
-- if your cousin never made any taxable gifts - because the gift value is above annual allowances - your cousin should file a gift tax return - but there would not be any gift tax due.
-- the gift your brother would made to your cousin's wife - would be treated the same way if it is not connected to your original transaction.
Okay, final scenarios . . .
My cousin gives me a gift in the amount of 150,000 and in a couple of weeks, I tell him I can't accept it. The bank will show 150,000 coming out, then 150,000 going back in. What are the tax issues then?
My cousin gives me a gift, but it is really a loan between my cousin and my brother (an advance on the sale of my brother's home. Again, 150,000 coming out, then back in, tax issues?
If the last scenario, above, was to take place. Could we prepare a promissory note covering the gift/advance without tax issues?