Distributions in excess of basis are not a partnership return item. You can add it as supplemental info on each partner's K-1. Show the total distributions in the Distribution box on the K-1.

You can't have negative basis. Do you mean the capital accounts are negative? And that is preventing efiling? I haven't seen that be an efile problem before. (But all kinds of poblems are cropping up now) What is the efile diagnostic?

It is a capital gain on the partners' tax returns.