C Corporation is thinking about selling the assets of the business and then closing. Of course it would be better to sell the stock to avoid double taxation. The shareholder seems to think that two small loans (that the corporation OWES) that will not be repaid prior to selling assets and closing, can somehow be "deducted" by the corporation before the tax of corporation is computed. This does not make sense to me. If the loans are not paid then would not these amounts be in fact INCOME (debt forgiven) of the corporation? One loan is for about $16,000 to a related small C  Corporation (stock owned by the same shareholder). The other small loan is about $11,000 that is owed to same officer/shareholder (as an individual). Thanks.