A few comments on this issue:
- Based on the limited facts, a negative number in box F essentially means you are potentially insolvent.
- This tells me that you also could be thinly capitalized or have potentially misclassified something as noted by @Mike9241
- As noted by @Anonymous_ the S corporation losses will be passed out to you as the shareholder; nothing is carried over at the entity level.
- As a shareholder in an S corporation you need to be tracking your basis in this investment. This is what form 7203 is for and must be filed with your return.
- Form 7203, when completed correctly, will tell you whether or not your S corporation loss is deductible on your personal tax return.
- Schedule K-1 line 1 can be either positive or negative, and is negative when losses are incurred at the entity level. Note the actual schedule K-1 which reflects (loss) directly on the form.
- From the facts, I can't tell how long you have been in business, but it sounds like a meeting with a tax professional would be in your best interest to provide you with a better understanding of how the S corporation tax works and is reported.
*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.
