Should TurboTax reduce the amount of loss on my 1256 contracts? It's making a different between Tax & Boo amounts.

no. you report your section 1256 net on form 6781. if this is personal, net 1256 losses will flow to schedule D to be offset by other capital gains if you have them. in any event, net capital losses for personal income tax purposes are limited to $3000 ($1500 if MFS). you may also have the option to carry back net 1256 losses to prior years. there are special rules for this in the form 6781 instructions for box D.

https://www.irs.gov/pub/irs-pdf/f6781.pdf