As for what I ended up doing: I was able to clarify that my original investment was basically traded for new shares in the C corp. To handle this in Turbotax, I "sold" all partnership units for my original investment cost. This allowed Turbotax to 1) Show no net capital loss/gain on the transaction (As required by U.S. Code § 351), and 2) allowed the passive losses to be recognized in 2019 since my units were in fact fully divested. The ending capital account under section L of K-1 did not matter, since U.S. Code § 351 requires there to be no gain or loss. If you enter the capital account balance, TurboTax will calculate a $5 loss, which is disallowed.
Hope this helps.
