The distributions reported to you with Schedule K-1 should reduce your basis to zero on Form 7203. This amount should appear on Line 6 but enter only as much as you need to bring Line 15 to zero. The excess (as discussed) is capital gain.
If you're using TurboTax Online, you'll need to work in the embedded image of Form 7203 that the program provides for your use. This appears after the carryover entry screens (if any) on a page titled "S Corporation Basis." Use the gray scroll bar within the form to find Line 6.
You can access this using Forms Mode in TurboTax for Desktop.
Follow the instructions on each line, as TurboTax may not update the calculations based on your entries.
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