Ok. My suggestion would be to call your original contribution a capital contribution unless you begin paying interest on the "loan" and also begin making payments on the "loan".
Also, you need to begin tracking your basis; capital $40,000 + income $10,000 = $50,000 less distribution $8,000 = $42,000 ending basis (obviously rough figures based on your facts).
*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.
