Tom, I made the comment that you reference in your first parens. The point of the comment to the OP is that if the S corporation is not making any profit, then the K-1 is not passing through profit and the shareholder should not have any tax to pay at the 1040 level.
No question there are other implications, basis adjustments, but the OP is asking about current tax implications. If no S corp income then there should not be any current tax implications at the 1040 level.
*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.
