You enter the K-1 boxes into TurboTax just as they are shown on the K-1 your received.
When you enter your K-1, on the initial "Describe the Partnership" screen you check the box that you disposed of your interest in the partnership during the year. This will trigger the deduction of any prior year passive activity losses for the partnership in this final year when the property was completely disposed of.
Then, when TurboTax gets to the questions about the disposition of your property, you won't report sales proceeds because you didn't sell your interest to anyone, the partnership terminated. Your cost basis is also zero, based on the final partnership capital account for you.
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