Thank you for your reply. The loss is a result of negative investment performance in the funds the excess contribution was allocated to. After posting this question I did some more research and believe I found the answer. I am supposed to input the 1099-R into Turbotax exactly as I received it (not showing the amount of loss). Then on line 21 of form 1040 I enter an "other earned income" and label it "Loss on Excess Deferral Distribution" and put in the amount of the loss as a negative number.
