Yes, you have recorded this situation in the correct manner. Here's a summary of how your entries should be made:
1. Beginning and ending basis will be the same (negative). Ending basis is set right before you dispose of the investment.
2. Check the boxes for "This partnership ended in 20XX" and "Complete disposition."
3. Check the box for "Sold Partnership Interest" to allow you to enter sale information so your suspended passive loss carryovers offset any potential gain.
4. Purchase date is your first contribution to the partnership; Sale date would be 12/31 of year you are reporting the dissolution.
5. Selling Price = zero.
6. Partnership Basis is per your records, a negative number. If you have AMT Basis, enter that as well.
7. TurboTax will calculate a tentative regular and AMT gain or loss.
8. Continue to the page "Describe the Partnership" and check the boxes for "I have passive activity losses" and "All my investment is at risk."
9. Passive loss carryovers (suspended losses) are per your records for Regular, AMT, and QBI. TurboTax will ask you to break down the QBI losses by year (be sure to enter zeroes for any years with no QBI carryovers).
The suspended losses will offset the tentative gain/loss previously calculated. The net will be reported on Schedule E page 2 Part II Line 28 under Passive Income and Loss. The sale is reported on Form 8949 Part II Line 1 and on Schedule D Part II Line 10.
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