Regarding Option #2, your explanation statement regarding the return of contribution takes the place of the Form 1099-R. Entering the anticipated Form 1099-R into TurboTax simply causes TurboTax to include the gains on (2020) Form 1040 line 4b, it does not cause the entered 099-R itself to be included (unless the code is J8 and the Form 1099-R has tax withholding in box 4).
Option #3 is essentially no different that Option #2 except that it prevents you from e-filing.
