You enter the full amount of contribution as withdrawn on the penalty screen during the IRA contribution interview.
Plus your 1099-R will have the codes J and P in box 7 showing it was a return of excess contribution plus earnings but since no earnings are reported in box 2a the IRS will know there was a loss.
[Edited 3/8/2022 | 6:37am PST]
@rcamner
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