I just talked to IRS representative and she said that I could enter real cost basis and real sales proceeds for such trades. Net result will be the same and in case of any questions from IRS I can substantiate my entries.
My broker (t. Rowe Price) actually provide this info on 1099B in the note below every entry.
Description (Box 1a): PUT NETFLIX INC COM 04-17-20 425.00 CUSIP: 99QAQ8A6R
BUY TO COVER 10 04/16/2020 04/17/2020 (3,390.74) 0.00
Actual Proceeds: 2,629.60, Original Cost: 6,020.34, Realized Gain or (Loss): -3,390.74. The IRS requires reporting as displayed above. See the instructions for this section for more information.
