When this guide is useful
This fictional case involves an owner loan after prior-year losses.
The distinction that matters
The scenario separates contractual debt, payment evidence and adjusted debt basis. A bank memo stating loan repayment does not determine the shareholder's tax treatment.
A worked situation to investigate
A fictional business repays its owner after using a shareholder loan to support earlier loss deductions.
The example is illustrative. Begin with the underlying event and its source documents, then separate missing facts from disagreements about their treatment. Work through the checks below in the order that matches your file, rather than treating a completed checklist as a tax conclusion.
Build a traceable handoff
Identify the affected person, entity or property and the relevant period. Keep original evidence, corrections and the reviewer's written conclusion connected. If the facts change after review, preserve the earlier version and ask whether the change affects implementation.