Sorry, that’s taxable.

“[A]lthough a loan provides money to the borrower that can be used for temporary economic gain, it is offset by a future obligation to repay. As there is no overall
improvement in the borrower’s economic situation, there is no gain to be taxed. This contrasts with the taxable treatment of embezzled or misappropriated
funds. A leading tax treatise calls this the ‘theft-loan dichotomy’ that James [v. United States, 366 U.S. 213 (1961)]s] ‘no consensual recognition of an obligation to repay’ requirement seeks to enforce.” (other citations omitted). Accordingly: “‘A mutual understanding that Sun would ‘return some money to Mr. Cheung at some point’ is thus not enough to constitute the bona fide loan that would allow Sun to avoid reporting as income the millions he used to gamble, to bolster the financial condition of his
company, and to produce investment returns that he retained and commingled
with his other funds.” Sun v. Commissioner, No. 16-60270 (Jan. 18, 2018).