I guess I don't know that there is a problem. lol
I was worried that since that $25k was in the box that says it was an item that affected basis, I was concerned that it was going to make my basis in the company a negative amount, and thus subject to capital gains.
This is the first time I've done a loan to the business so I just wasn't sure how that should appear on the K-1. In my head, I just imagined that if the loan crossed a year boundary that one year would have shown a +$25k, and the other year a -$25k, thus zeroing out. So, if both the loan and the repayment occurred in the same year, I wasn't sure why it was being shown at all. Again, this is just the logic that was going through my head based on absolutely nothing. lol 🙂
But I see now that even though that $25k is in that box, it's not affecting my basis the way I misunderstood that it was.
As an aside regarding interest, I actually did charge the business interest at 5.5% APR on a signed promissory note for recordkeeping. Making the loan to the business meant I was missing out on the 5.5% APY I would have received if I had left the money in my HYSA, so I figured it was only fair to make the business pay the interest I missed out on. I then issued myself a 1099-INT from the business for the interest that was paid to me (since that's what TurboTax told me to do lol).
