The proper way to report the recharacterization and earnings which is to enter the 2017 IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".
The amount The amount of the original Roth contribution must be entered - not any earnings or losses.
Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.
There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.
There will only be a 8606 if the contribution is not deductible or you choose not to deduct it then it would be on line 1, 3 and 14.
Thanks for your response!
So I when to click next to the accounts I contributed to, should i click both roth IRA AND traditional IRA? OR when I say i recharacterized the roth does that take care of the traditional portion.