On 1120S you report as a distribution as ABCtax55 said.

You can (Should) include the ShareHolder Stock an Debt Basis Limitation Worksheet with the K-1's to aid the taxpayer in preparing their Individual 1040's.

Form 7203 (NEW for 2021 Individual 1040) is included on the Shareholder Level to file with their returns. This is not attached to the 1120S or part of the Corporate Return.