S Corp 100% owner contributed $200K+ more into his business than the amount of distributions taken. He incurred a huge loss in 2021 due to legal expenses related to an ongoing lawsuit. This is the reason for his additional contribution.

For banking and other purposes he would like this additional amount to be shown in the equity section of the balance sheet.

How do most of you handle this situation?

I know a lot of tax preparers report this as a shareholder loan to the corporation. However, with these small S Corps there never is a loan agreement and no interest is charged.

If it is reported as "Due to Shareholder" then it is reported as a current liability on the balance sheet and no basis is reported either.

I don't think it should be reported as Additional Paid in Capital since the owner intends to get the money back as soon as possible. For instance, if the owner takes more distributions than he has basis the next year or the following year then he can't reduce APIC for the excess distributions.

I want to check to see if any of you know a way to handle this that will give the taxpayer basis and show the additional contributions in equity.

Thank you.