Actually, as a Publicly-Traded Partnership (PTP) owner, you will take your capital account balance as shown on your Schedule K-1, and add it to your nonrecourse liabilities figure (also shown on the Schedule K-1 mailed to you). If and only if the sum of those two balances are negative, do you then need to "recognize" a long-term capital gain on your Form 1040 Schedule D . . . so as to "restore" your outside "basis" in the MLP back to zero, in compliance with the tax laws.
But, if you do need to take that step, then what you will want to do is the following.
Make a new entry in the Stock Sales / Investments section of TurboTax, and report this as a sale of a long term asset, even though nothing has really been sold. You call it a stock sale or equity sale, so that you'll be accorded the proper capital gains tax treatment; and then enter a sales price sufficient to "restore" your outside basis in the Master Limited Partnership back to zero -- factoring in your nonrecourse partnership liabilities designated by the PTP. That is, you'll need to add a figure to your long term capital gains, sufficient to make all three numbers (capital account, nonrecourse liabilities, and long term capital gain added) total out to zero.
The cost basis amount in such a Schedule D entry can be entered as $0.01, just to avoid any software error, and is a negligible amount that won't affect the outcome. The "category" for Form 8949 purposes should be "F," signifying long-term, "noncovered" items. You can name the MLP, on the Form 8949 data entry, to help identify (and remember) what this item is. Call the entry something like "XYZ PTP, Basis Restoration" or similar.
For future years, if you continue to own the MLP, then you'll further need to track such outside basis adjustments manually, as your MLP's tax office usually won't do it for you, and won't adjust your capital account (as printed on the Schedule K-1) for you, to reflect any such actions that you've taken in reporting long-term capital gains on your tax return. Additionally, your nonrecourse liabilities (as shown to you annually by your MLP on your Schedule K-1) will continue change each year as well. Thus, you will need to take into account those future changes in nonrecourse liabilities, as well as track your outside basis, so as to properly continue to make such future adjustments (i.e., declaring long-term capital gains) to keep your basis at "zero" or above.
Of course, seeking professional tax preparation assistance, when dealing with the trickier issues of MLP taxation, is always an advisable course of action (or option) as well.
Thank you for asking this important question.
