F4952.... of course !!     Which means it's useless because client can't itemize.

Thank you @IRonMaN .              

You betcha!

But of course, relying on your advice the client is charging a higher interest rate than what is being paid, to make up for the tax owed. 

Right?

@BobKamman     "relying on your advice"    Hahahahaha  I don't have those kind of clients.  Mine like to show up with surprises.    However, the client is charging 2% more than they're paying.  Not sure I agree with lending to your employer, other than it maybe helps with job security. 

Doesn't investment interest carryover if not used?

yes, unused amount carries forward.  Still doesn't help client if they can't itemize when it can be used.     

I need to educate client on tax implications of lending out money s/he is borrowing.