Tax implication of loan from Korea to US

For cross-border transactions like this you should really take advice from an accountant or lawyer who specialises in them, because there may be tax treaties between the two that complicate the situation.

However, in general borrowing money doesn't have tax implications in itself, and there's no limit as such. You do need to consider the following points:

The rate of interest

If this is zero or less than you could plausibly get commercially, your friend is effectively giving you the difference between the interest rates.

If your friend in Korea has a connection to the US she or he may be subject to the gift tax. In practice this only matters if the total amount of gifts they give to anyone over their lifetime plus the size of their estate over their lifetime is large.

Non US-persons are exempt though if the amounts are large enough they may need to be reported.

Money laundering regulations

Financial institutions are generally required to report large international transactions (typical thresholds are around $10,000) for scrutiny by the government, in case the transaction is related to something illegal.

This shouldn't be a problem in itself but you should be aware it'll happen. It shouldn't make any difference how you transfer the money, but it would be wise to get as much documentation as possible in case of later questions. The best place to get further advice would be the US bank you'll be transferring the money into initially.

Contract

This is really a question for a lawyer given the cross-border nature of the transaction, but you and your friend should sign a contract specifying how and when the loan will be repaid. Your friend should also consider setting up the loan as a mortgage and taking a charge on your home. Even if your friend trusts you, a charge on the home will protect him or her in the event of you having financial problems and another creditor laying claim to the home.

You need an accountant and/or a lawyer who is familiar with the US tax code and the rules in South Korea (assuming from your tag).

As the interest will be money generated in the US, you could be required to withhold some of the interest and remit it to the IRS (I believe 30% withholding rate).

Since South Korea is a treaty country, your friend can complete and sign a form W8-BEN and give it to you, so you may withhold a lower amount. Your friend would need to file a return if too much was withheld. They may also get taxed in South Korea.

There are probably rules in South Korea about minimum interest that must be charged, similar to Applicable Federal Rates for the US, so check with your accountant or lawyer for this.

If you craft it correctly, you will be able to have a loan as a mortgage (with the house properly secured), which then would allow you to deduct mortgage interest rates from your return.

As far as I am aware, there is no maximum amount for loans.

If your friend is loaning you KRW which you are then converting to USD, then there are tax implications. This would be a Section 988 transaction so "gains" or "losses" made during repayment (partial or complete) due to fluctuations in exchange rate would be treated as ordinary gains or losses.

For example, imagine you borrow 100,000 KRW and, at the time you borrow it, this is worth exactly 100,000 USD. At some future point, you repay 20,000 KRW. If the exchange rate at that point is such that 20,000 KRW is worth 15,000 USD, then the IRS sees that you have "gained" 5,000 USD in ordinary income. This is a particular concern if the loan is a mortgage and you refinance the mortgage at a moment in time with a more "favorable" exchange rate than the exchange rate when you first got the mortgage.

See http://www.investopedia.com/terms/s/section-988.asp for some additional discussion.