I think you are referring to item I1. on schedule K-1 for a partnership "What type of entity is this partner?". The instructions to Form 1065 for that line read as follows: "State whether the partner is an individual, a corporation, an estate, a trust, a partnership, a DE, etc..." The abbreviation "DE" stands for disregarded entity. So, it seems TurboTax is entering the correct description as you stated the shareholder was a disregarded entity.
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