@brent3 , agreeing with @NCperson , if this is a formal loan . he either has to charge a market rate for this type of loan or be subject to imputed interest earnings.
On the other hand if this is personal and informal loan ( word of mouth ) and therefore not enforceable as far as return of the monies are concerned ), then there is no reporting and nothing happens-- not a tax event. Generally most , would opt for a written and formal document ( to ensure pay back and not being treated as a gift ) and therefore market interest rate needs to be shown as income.
