I want to make sure I'm doing this right...

An S-corp is closing down with an outstanding loan from its sole shareholder. It's not going to be repaid. The corp recognizes forgiveness of debt income. It's in Illinois so the corp has to pay the replacement tax on the income. For the shareholder, the  income from the S-Corp is reported, but it is offset by a business bad debt loss that is reported on Line 8 of Part 1 for the loan that is not being repaid.

Make sense?

Thanks.

Rich