There is no modified AGI limit for being eligible to make a traditional IRA contribution, only a modified AGI limit for being eligible to deduct the contribution.
Because there was no excess contribution, TurboTax will not provide an opportunity to enter how much contribution was returned. Instead, since the entire $7,500 contribution was returned (with the amount distributed being adjusted for investment gain) you'll simply have to omit the $7,500 contribution from TurboTax by indicating that nothing was contributed to a Traditional IRA for 2023. 2025 Form 1099-R that he'll be receiving next year will still need to be entered into TurboTax to report the gains as taxable income.
