That's because you have it coded as a loan repayment on the K-1.
A normal distribution is coded 16D.
If you are going to leave it as a loan, this will change how you track your basis. Additionally, you will need to tell TT the basis in the note in order to avoid income recognition.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
