I suggest reporting the 1099R distribution amount as $6000 in order to satisfy the return of contribution requirement so that Turbo Tax or IRS doesn't think you still have an excess withdrawal requirement of $1500.
If the IRS questions you about the discrepancy of the reporting, just explain you requested a $6000 withdrawal of an excess contribution but because of the market downturn, you were only issued a distribution of $4500. You were advised to report this by a Community Turbo Tax Expert. Keep a copy of this entire thread showing the tax advice you received.
As far as the $1500 loss, you would not declare that loss because your retirement account already is receiving tax-favored treatment. In fact the IRS mentions this in the following notice.
You do not need to amend your 2021 return.
@rlsiegel78
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