The Form 1099-K is not a form that is entered or sent to the IRS with your tax return. As @MinhT1 indicated, a loan is not income and does not get reported on your tax return. Keep the form, notes and details with your tax return to verify the loan and repayment for future use should you need them.
PayPal is considered a payment settlement entity(PSE) for money transactions. Form 1099-K was introduced to report income received from electronic payments, such as credit cards, debit cards, Google Checkout, PayPal and other payers. You should receive this form if you received payments from electronic or online payment services, or credit and debit card transactions.
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