I have a C corp (100% owner) and took 35k from it as compensation but I did not give myself a W-2 since I don't do any work. How should I report this income on my 1040?

[MichaelL1]

If you "took 35k from it as compensation" it would be a wage subject to a W-2 being issued. 

Taking money out as compensation is a salary, now if you did no work, then it should be a dividend (if no profits then return of capital) and it can't be a loan as there is no intent to pay it back.  

Below are a couple links you should take a look at.

https://ttlc.intuit.com/questions/3781276

https://www.avvo.com/legal-answers/does-a-c-corp-have-to-pay-salary-to-sole-owner-wor-1251806.html

[belavistainc]

I was not on payroll and didn't issue w-2s. I'm guessing it would be less expensive to have it as a dividend now correct? I am now on the payroll so won't have this issue again.

[MichaelL1]

probably due to penalties now if you go back and issue a w-2 to yourself as the 941 and 940 and possibly a state form would need to be corrected.