The suspended losses are carried forward and allowed when basis exceeds zero. This is a complicated area to explain in just a few sentences. I will provide some links below for reference. But the upshot is you can't claim losses until basis exceeds zero; while current income is claimed and reported.
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-stock-and-debt-basis
https://www.irs.gov/instructions/i1120ssk
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
