Q1: Use the 1099-B. The K-1 reporting for sales has a bug, and shouldn't be used. Enter 0s for everything, unless you have Ord Income. In that case, see Q4.
Q2: It can be done in either the interview of forms. During the interview, their will be an opportunity to say that you need to correct information provided by the broker. You can then adjust the cost.
Q3: Not sure. I believe its just how the broker reported it, but you'd have to verify.
Q4: When you enter the sales data, instead of all $0s, you'd enter 6000 for the sales price and $6000 for Ord Income. This will still calculate to 0 cap gain as far as the K-1 is concerned, but the Ord Income will be reported correctly. Your basis for the sale would be 5000-7000+6000 = 4000. The source of the Ordinary Income is usually depreciation: partnerships take lots of depreciation, which shows up in box 1 as losses. But when you sell, they have to reverse some of that if the underlying assets are worth more than what's on their books. So the Ord Income is really just a reversal of the Losses that will be reported on Sched E
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
