Regarding the IRS, the key point is that you must report and pay income tax on interest, even if you don’t actually charge interest. This is called “imputed interest“. The IRS expects the taxpayers will do business in a businesslike manner, and this includes charging interest on loans. You must charge at least the minimum federal rate, using the tables linked to by the other expert. You can charge more, of course. If you don’t charge interest, you must still report interest income you would have received using the applicable federal minimum rate.
You would report the interest income on your tax return, as interest not reported on a 1099-INT, since your relative will not have a Social Security number and probably will not have a US ITIN. Repayment of the principle is not taxable income to you, only the interest. There are several calculators on the web that will help you construct an amortization table to tell you how much of each payment is interest.
You are not required to issue any tax statements to the borrower, because you are not in the business of lending, and it doesn’t matter if the borrower is a non-resident of the US.
For the wire transfer itself, banks are required to report transfers of over $10,000. This does not trigger a tax requirement, but is mainly used to track possible money laundering. You don’t need to worry about this part, it won’t affect you directly. However, you should not try to structure the transaction into several payments of under $10,000 instead of one payment over $10,000. This can constitute a separate financial crime called “structuring“, where trying to avoid the $10,000 limit can be a crime even if the underlying purpose of the transaction is completely legal.
Some loan documents for your records, like a signed contract specifying the terms and interest rate, will also be helpful, although you won’t send these to the IRS unless they request.
