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Should I enter the capital from 1099DIV elsewhere to make line 22 show 0 income?"
No. First, ensure that you have both allocated the gain to your beneficiary and also allocated the gain to income (see first three screenshots below).
Next, ensure that you have actually distributed the gain in the Distributions section of the program. If, for some reason Percentages do not work, try Distribution amounts (see fourth screenshot).
If your K-1 still does not include the capital gain, enter Forms Mode and type the beneficiary's percentage of the income distribution deduction directly on the K-1 (see fifth screenshot).
