what's the problem? the schedule shows the repayment is non-taxable. 16E only tells the IRS there was a loan repayment - not that it's taxable. the K-1 does not show and has never shown loans the shareholder(s) make to the corporation. that's probably why the IRS developed the form because some shareholders were misreporting basis and loan repayments when loans were used to provide basis for deducting losses. There is also the issue of whether the loans should carry interest.
IRC 7872
(3)$10,000 de minimis exception for compensation-related and corporate-shareholder loans
(A)In general
In the case of any loan described in subparagraph (B) or (C) of paragraph (1), this section shall not apply to any day on which the aggregate outstanding amount of loans between the borrower and lender does not exceed $10,000.
(C)Corporation-shareholder loans
Any below-market loan directly or indirectly between a corporation and any shareholder of such corporation.
put simply the loan was above $10K and the S-corp should have paid you interest on the loan.
