I did a quick test and am not getting the results you are apparently seeing on your return.
The K-1 gain is being offset by the capital loss I entered.
Are you sure you selected the right type of K-1 (e.g., the S corp and not the estate/trust)?
I think what is very troubling is that if I delete the K1 and re-enter it, the return updates to reflect this amended K1. However, if I just "edit" the existing K1 to restate the ordinary income as short term capital gain then there is no change reflected in the return. How would someone know that the only way to amend a K1 is to delete and re-enter it. If I had not understood that my tax liability is reduced by this amended K1, I would have just assumed that short term capital gains are taxed as ordinary income and thus there is no change to the amount of tax I owed. This would have been a costly error. Either way I have lost a lot of confidence in Turbo Tax. After nearly 20 years of using this, I am going to a real person from now on, at least until the government allows us to file on-line for free.
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