There is no need to reduce the capital stock account. If you have taken distributions in excess of retained earnings, the retained earnings account will be negative.
I do not use Turbo Tax so I cannot tell you specifically what to do with that software, but there has to be a way - negative retained earnings is not uncommon. Turbo Tax support indicates that retained earnings can be negative. See this link http://turbotax.intuit.com/support/kb/general-program-issues/entering-your-data/740.html.
My guess is that there is a box to check or an interview question to answer that will allow this to happen properly.
It is quite normal for capital stock to be less than cash. Capital stock is a defined number - number of shares outstanding times par value per share. There is no negative or positive impact on anything based on the capital stock amount. You can make it $0, $1,000, or $1,000,000 and it will not have any tax impact whatsoever. So, if you want to change it, go ahead.