The 1040 person is a cash basis taxpayer. My psychic abilities see nothing add with the accrual basis of the corp, unless the loan was some stinky accrual of wages earned or other such distasteful things. The 1040 person is the "owner". The 1040 person should have a basis in the shares and possibly an exposure for debts owed by the corporation.
Unless the person is in the business of loaning money, it is a nonbusiness bad debt OR it is an investment loss of the basis of the worthless shares. You are the one being paid to do the return. You are the one signing the tax return. You have to find out what tastes right to you.