I'm the 100% owner/president of a small S Corp. I often struggle unsuccessfully against my own inertia to get the company QuickBooks file in good enough shape to import data into TurboTax business. This has led to my being embarrassingly late with most 1120S filings ever since I took the company over in 2003. In fact, it was only this past week that I finally filed my 2009 & 2010 1120S forms!
(I expect this is sadly amusing if you're not me---especially if you're an accountant. That's all right. Go ahead & laugh---especially if you're willing to help me!)

When I reconciled all QuickBooks accounts recently so I could complete my overdue tax forms, I learned that, though our books had always shown a profit of about $8,000 for 2009, the business had actually lost about $8,000. That year, my wife and I were rebuilding a fire-damaged home and I was foolishly putting a lot of personal charges on company credit cards. When we completed repairs and financed the house, I deposited funds in business checking to reimburse the business.

Unfortunately, I didn't balance the credit card accounts at the end of fiscal 2009. Had I done so, I would have seen that the business owed me money and would have transferred the excess $8,000 I'd deposited in business checking to my personal account. Of course I can't do that now...

So, in my recent filing, I called the whole $16,000 I'd given the company a "Loan from Shareholder" and, knowing the IRS is picky about such loans, I made up a Note Payable on Demand between the company and myself with annual interest of 12% payable on 12/31. (Along with my 1120S, I sent the IRS a copy of the Note and an explanation of the circumstances.)

To THE QUESTION:

Having finally gotten my K-1 (from my irresponsible company!), I was just able to complete my personal taxes and was distressed to find that I got no deduction for my $8,000 (inadvertant) investment in my company. In fact, TurboTax indicates that I have to pay tax on the money I put into the company, money I had only because I'd been able to finance the fire-damaged home. This doesn't make sense to me!

I hope I'm doing something wrong or that you can advise me on a way to file that will avoid my being taxed on the very money I loaned my own company---even if it means filing an 1120X...

Thank you in advance for any counsel you can offer!
SenorN