Under the Idle Asset Rule, court cases, going back to 1930s, have held that that a taxpayer may continue to claim depreciation deductions while an asset is idle, provided the asset remains devoted to the taxpayer’s business and is ready for use when needed. Idleness does not mean a withdrawal from business use.

Of Course, once the S corporation passes the depreciation expense to the shareholder on a Form K-1, he may or may not be able to use the deduction depending on (1)  the shareholder’s basis in stock and debt, (2) the amount of the shareholder's at-risk investment, and (3) the passive activity loss rules. But that's a different matter.