Remaining loan basis upon dissolution of S corp

I am working on the 1040 for a husband and wife who owned an S corporation that was dissolved as of 12/31/17. Their shareholder basis worksheets show $0 stock basis but $11,200 each for loan basis. They had loaned money to the corp and never got paid back upon dissolution. How do I report this on their 1040? There are no written loan documents. Is it a STCL on the 8949?

Thanks for your help!

Where is the money? If they had $22,400 in liabilities on the balance sheet - what is the corresponding asset or equity?

These situation are much more likely errors in bookkeeping, that just should be corrected. Very unlikely that an S-corp will have any capital losses on liquidation, especially if they are the original owners and they have been an s-corp since inception. Much more likely is someone did not update a basis schedule.

The original basis worksheet was prepared by a prior accountant. We used the ending balance as our beginning balance when we obtained this client a few years ago. You may well be right that the basis worksheet is incorrect. There were loans on the books from the shareholders at dissolution of $28,500. The debit offset was to retained earnings. Yes, these are the original owners and the entity has always been a S corp.

So I guess that I'm leaning toward not taking any type of loss based on this remaining loan basis, which is probably incorrect.

They probably already took the operating losses, so they would have no basis in the loan afterward.