"did not make a contribution to S Corp."

I agree with the analysis as to whether the S Corp was "in business" yet, because how can you "do business" without any assets or resources? What you also need to do is examine those expenses, because a person like this will attempt to run everything through the business that they think can possibly be termed as Business, and a lot of that will be personal.

And right now is a good time to find out why the S Corp was formed. We've seen a lot of bad guidance on this. There still is time to dissolve that concept.

"Is it fair to have 20k contribution (difference between income/expenses), -20k net loss and no salary/distribution?"

There is no Fair, in IRS terminology.