Thanks, Fanfare. I think I finally understand what you are saying.
For the amount received, I should only enter the RMD amount that I received from the TSP, not the actual distribution that was reported on the 1099R, because the extra 2,000 cannot be applied. If that is the case, then the question should still be reworded since the average person, like me, would have no idea.
Even my investment advisor didn't know. He thought the TSP excess could be used to offset the IRA RMD - but not the other way round. Although, the IRA account specialist from the same firm didn't think it could be used that way. Of course, both of them caveated whatever they said by telling me they weren't tax specialists.
