See page 11 of IRS Pub 525 where it says:
Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Schedule 1 (Form 1040), line 8z, and identify it as “Loss on Excess Deferral Distribution.”
https://www.irs.gov/pub/irs-pdf/p525.pdf
