Schedule K-1 disposition partnership interest in LLC converted to C-Corp

There are a number of issues here and I will provide some general comments:

1. I don't agree that your basis is zero due to Section 83(b).  Your basis may have started at zero when given your profits interest, but your basis is adjusted annually for the applicable lines on your K-1.
2. Regardless of what your basis is, this basis is now the basis in your C corporation stock and unlike your LLC basis will not change; unless of course you contribute additional capital.
3. The LLC does not have cumulative losses.  Losses and income of an LLC are passed out to the members.  The LLC may have negative partner capital as a result of losses.
4. This negative partner capital is a book issue.  What you need to understand is what is your tax basis.  As a member in an LLC you need to be tracking your basis as noted in item 1 above.
5. Do you have suspended losses?  Are these the result of no at-risk to take the losses?  If the LLC return was done correctly, you should not have been allocated losses if you did not have any basis.  This would be contrary to the regulations under Section 704(b).
6. So while you didn't technically "sell" the LLC interest, not sure there is a better option within TT to address this from a TT perspective.  I would think that your sales price and basis are zero based on your facts which would result in not tax impact.  This makes sense.

Thank you so much - your answer together with what I have been reading on the IRS, etc. publications, helped me tremendously.

You are welcome.  Glad to have provided some guidance.