After reading the IRS Pub 550, I come to similar conclusion as your. If the Cash Liquidation Distribution resulted a gain, then you need to report the gain now, even the distribution is not final. And, you should not report any capital loss until the distribution is finalized.
Regarding to the 1099-B matching, after you edited all your offio1099-B, there’s an option for you to add another sale “not reported” on 1099-B. I believe that this would alert the IRS system only match the total proceeds from reported 1099-B to the total proceeds on your tax return “excluding” the sale item specified as “not reported” on 1099-B.
I would not concern a IRS red flag since you are reporting a gain. The worst thing it could happen is you would receive a letter audit stating that “you over stated your capital gains and therefore you are entitled additional refunds!”!?!?
