But that Ordinary Loss still goes on 4797 (Part 2).  The Instructions for 4797 even say so.

As for how to make the software do put it in Part 2 rather than Part 1, I'm a ProSeries user so I can't help you with with how to make PTO do it.  Hopefully there is a direct mechanism to do it; otherwise if you find a way to force it as short term it would go in Part 2.