You were told incorrectly.
1) The disposition of your S corp stock is only handled at the personal level and should not be reflected on your S corp K-1. The stock is yours, not the company's.
2) Your S corp stock began with your $1,000 initial capital contribution, but should have been adjusted each year by the applicable lines on your K-1. Extremely doubtful that this is now $1,000.
3) The disposition of your S corporation stock, based on your facts, should not be on your K-1, should not be reflected on Schedule D line 5 or 12.
4) While your sales proceeds may be zero, assuming you received no liquidating distributions, but your basis needs to be determined as noted in item 2 above.
5) Since you have held your stock for a period greater than 12 months, this gain or loss will be reflected on Sch D and the applicable form 8949 code F.
*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.
