Sorry - I just realized what was happening. I'll note it for anyone who runs into the same issue.
When recording info from my K-1, on one slide I was asked a variety of questions, one of which was something to the effect of "Did you dispose of a portion of a partnership interest?" To which I replied in the affirmative. However, I believe this question is meant to be taken literally - i.e. did you sell a fraction of your partnership interest.
There was another option which was something to the effect of "Did the partnership terminate?" I'm not sure that is technically correct anymore - a partner leaving a partnership no longer causes a technical termination. But for MY purposes, I disposed of my entire partnership interest and so I am no longer in the partnership. When I selected this option, it started asking me appropriate questions about the sale, confirming it was for my entire interest, etc. Once I took that route, the capital loss was properly applied against existing gains as I expected it to.
Thanks!
