I have an S Corp client with a loan to the corporation that has been growing each year. What usually increases the loan is that he doesn't actually write out a check to reimburse himself for out of pocket expenses. His comment is usually, "Well I don't really need the money." So it gets booked to the loan from shareholder account. That's usually a few hundred to maybe a couple thousand a year. There are, however, two good sized loans, each several years ago, to the corporation from personal funds to pay off outstanding debt. I'm thinking that since no effort is ever made to repay them, it might be best to re-classify them to APIC, and have a corporate resolution authorizing that. Is there any dastardly reason not to do so?