1 - You'll need to update your basis at the beginning of the Schedule K-1 interview. Look for the page "Enter Capital Account Information." You can enter your own numbers here, rather than the Capital Account Analysis from the K-1. Bottom line: make sure the Ending Capital Account matches the final adjusted basis you have calculated.
2 - Line 4a would be the total business income reported to you. If the primary business function was rental real estate, then this would be the net income from that activity.
The essential function of the worksheet is to organize the items that affect your basis. As long as you add income and gains, and subtract deductions and losses, you should be fine.
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