I am about to be repaid a substantial sum of money I loaned to an individual in distress. I understand that since the loan was made with after tax money, it isn't taxable. The individual proposes to pay me in cash. How do I handle the money.
Federal law requires financial institutions to report currency (cash or coin) transactions over $10,000 conducted by, or on behalf of, one person, as well as multiple currency transactions that aggregate to be over $10,000 in a single day.
Under 10K just deposit it into your accounts. It is not a tax event.
If it's over $10,000 it's still not taxable. Just deposit it in your bank account. The fact that the bank has to report it does not make it taxable.
The purpose of the report is to help the government detect money laundering. They're not likely to bother you about one large deposit. If you split it up to try to avoid the reporting, they might think you're trying to hide something.
If this is not taxable income, then you don't need to do anything.
Banks have a requirement to report large transfers, this will happen automatically and has nothing to do with you.
However, if you have your borrower make several smaller payments under $10,000 instead of one large payment so you can avoid the reporting requirements, be aware that this can constitute a financial crime called "structuring" even if the overall purpose of the transfers is completely legal. So don't mess around or get tricky, just let the borrower write a check or do a wire transfer or pay you in cash or do whatever else is convenient for both of you.