Hi Tax Guru,

I posted this message earlier today but I don't see it listed in the forum.

I am hoping you can provide some guidance about how best to handle shareholder loans made to an s corp that was dissolved in 2008. The loans are still outstanding.

Some Information:
1. Only shareholder.
2. Ended business operation 6/30/2008.
3. Short year return
4. Outstanding loan balance $9000.
5. Small profit for 2008
6. No cash available to repay loan
7. Balance sheet has been zeroed out.

Questions:
1. Can I deduct loans made to s corp on my personal tax return?
2. If not, can loans be reclassified as additional paid in capital and claimed as a loss?
3. What are tax implications for assets purchased in the last 7 years? All have either been fully depreciated or section 179 deductions have been taken. Not much market value, if any in assets. Last asset purchase was a notebook computer purchased in 2006 ($1500).

Thank you,