Thank you for clarifying, @ESbusiness2030
I think by the NOL you mean you have a negative number in box 1 of your Schedule K-1. And that would be correct if your expenses were higher than your revenue. Even if expenses were paid by the loan money.
As for the loan, since it doesn't sound like you've personally assumed it or have an obligation to repay it, if you were reporting a balance sheet, I would just leave it under long-term liabilities. But again, if you are not required to file Schedule L (balance sheet), I would suggest not filing it. And you are not required to file it if both your total assets and total receipts are less than $250,000.
If you had no distributions, then you will not have anything in box 16, code D of Schedule K-1. So, basically, the loan is not reported on your K-1, and thus, your individual tax return.
A word of caution taking a loss deduction from box 1 of the K-1 on your individual tax return. If the loss exceeds your basis in the S Corp , the difference should be reported on Schedule D as long-term capital gain. Read more about basis here.
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