Once you have paid tax on your income and are dealing with after-tax dollars, you are free to gift it or lend it or do anything else with it.
If you spend money in order to generate more taxable income for yourself, those expenses are usually deductible, subject to various rules.
If you loan money (to anyone) and receive interest income (get paid back more than you loaned) then the interest is new taxable income. The principle is just the return of money that was already taxed.
If you loan money and then get paid back without interest, there is no taxable or deductible event going on.
If you make a personal loan and never get paid back, so that you have a loss of money that you already paid tax on, you may have a bad debt deduction, but this is complicated.
Cash transactions more than $10,000 are automatically reported to the IRS to help them track money laundering and other financial crimes. If you structure a large cash deal into a series of transactions less than $10,000 to avoid the reporting requirement, that constitutes a new crime called "structuring" and your assets can be subject to seizure.
Your assets can also be subject to seizure if you are alleged to be involved in helping someone else disguise the illegal source of their income, even if your own actions would not be illegal but for the involvement of another person. For example, if you buy supplies for your contractor friend because he is low on money or has bad credit, and he pays you back when he finishes the job, there are no taxable or legal consequences. But if you buy hydroponics equipment and grow lights for your friend and he pays you back with money from selling pot (because he wants to hide the fact that he has a grow operation and doesn't want to pay cash to the hydroponics store or deposit the cash to his bank account), then you can be subject to legal action even though the separate parts of the transaction (buying grow lights and loaning money to a friend) are both legal on their own.
Hope that helps.
