When you enter your box 9 code C amount in TurboTax, on the next screen TurboTax asks if your Section 1250 gain came for the disposition of an interest in a partnership. If you answer yes to that question, TurboTax asks you to enter that amount in a box on the next screen.
Next, when you enter your box 11 code I amount, the next screen asks you to Enter your Code I detail. Check the box for Capital Gain that is not Portfolio Income. When the boxes upon up below that, enter your Code I amount in the Long-Term Gain not Portfolio Info box. When I replicated this, it did not show on line 12 of Schedule D, but it was included in the same total where line 12 goes, so it "ended up in the same place".
The tax amount may change twice as you enter this, as TurboTax gets the "new" information to correctly calculate your tax. In the end, the result is that your gain gets taxed at ordinary income rates, because the gain consisted entirely of Section 1250 depreciation recapture.
Also, you should note that your code 20 box V amounts it is very important to Continue through the K-1 interview after you have entered your code Z for box 20. Enter the code Z when you enter the K-1, but you don't need to enter an amount. Continue, and there is a screen near the end of the interview titled "We need some more information about your 199A income or loss". This screen must be completed in order for your box 20 code Z information to be correctly input into TurboTax.
To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.
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