I actually book it as an employee advance and then the shareholder repays it with the dividend.  No interest or loan documents are drawn up because its usually outstanding for a short period of time.  The only accounts that are hit are cash and employee advance.  When the dividend is given, it is employee advance and dividend account.  No expense count is involved since the Scorp doesn't own tax.  When the company was successful in 2019, it wasn't a problem to give the distribution because he had basis to cover it.  We don't pay the dividend until the following year which is why the issue since now there isn't enough basis for the distribution due to the large loss in 2020.  I am thinking I have two options, Pay the dividend and have the shareholder pay capital gains tax or convert the advance to a loan (with loan documents and interest) and wait until his basis is back up to issue the dividend and payback the loan.  I don't think I have an other options?  I would have to think a ton of people are in this same boat.