Tax implications on loan from a friend

Regarding the person ("John") in the USA,

1. In short, John MUST charge interest.

2. The specific interest RATE which MUST be charged is SET.

Here's a good explanation of that: https://www.muellercpa.com/newsletters/set-irs-approved-family-loan . (The rate in question was 1.29% when that article was written, for example.)

(John may charge more if John wishes, but that's the minimum.)

3. Say John makes $2000 USD each year in interest. In fact John MUST pay TAX on that interest. It is treated exactly the same as any other income for John.

4. Note that "how" John gets the money makes no difference whatsoever. The IRS doesn't know, care about, follow or have any involvement in "which bank" John gets the $2000 deposited to.

On John's tax return, John will write "I made $2000 interest on a loan." The IRS doesn't know or care if John was handed cash, used a bank account in Timbuktoo, or whatever.