We are assuming you are an S corporation shareholder since you indicate "share basis wks".
As a shareholder in an S corporation, you are required to maintain your basis in your S corporation stock.
Your basis could have two components to track; regular stock basis (actual capital contributions) and then debt basis (shareholder loans to the S corporation).
When losses are passed out to the shareholder, your stock basis is reduced first.
If your stock basis is used up (reduced to zero by losses and distributions), then a shareholder is able to use debt basis to take losses passed out on your K-1.
Using debt basis to take losses gets tricky as you need to track the FMV of the debt as well as the actual debt basis (which has been reduced as a result of using the debt basis for losses).
Repayment of a loan when the loan value is less than FMV (due to taking losses against the debt), will result in part of the repayment being taxed as a capital gain.
When the business begins to generate income, income allocated to you as a shareholder (on your K-1) will increase your debt basis first up to the FMV, and then will increase your stock basis.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
