I had people spit on me, throw things at me and want to physically fight me â people who had never met me or talked to me. In the age of social media, this is what I get:  @kato_kaelin why don't U just die, loser. Ur worthless.. Never has a man done so little to be recognized by so many.
Full or partial cash repayment of the debt by the corporation reduces the shareholder's loan basis. (Repayment with property other than cash is beyond the scope of this item.) If the debt basis has previously been reduced to zero, all the subsequent repayment is treated as taxable income to the shareholder.
If shareholder loans are present and they are not respected as true loans, the following risks are present: 1  If the S corporation loans funds to a shareholder the loan could be re-characterized as a distribution, thereby causing distributions to be disproportionate. If a shareholder has previously loaned funds to an S corporation and such loan is re-characterized as an equity investment, payments by the corporation to the shareholder could also be re-characterized as distributions again causing such distributions to be disproportionate.