I was in a llc partnership and we were taxed as an S corp.So every year each shareholder filed an 1120(s)k-1. The business went south and I sold my shares back to the other owners effective Jan 1st 2010. I had to pay to get out because the business was "upside down" and had a lot of debt. The business is technically still open with the other guys as owners but they are just contributing capital each month to pay back creditors. Can I claim the money I had to pay to sell my shares back as a loss? If so, how would I file that on my tax return?

That is an exceptionally complex question which really cannot be answered without examining the tax paperwork for the corporation.

I suggest you contact a local tax professional to get face-to-face advice.