"if that specific investment asset was distributed in-kind out of the IRA, what value should be reported on a 1099-R, $1000, $200, or some other value?"
The value reported on the Form 1099-R is the value that the IRA custodian placed on the investment at the time of the distribution. That value become your cost basis and the holding period begins on the date of the distribution.
The IRS generally places on the IRA custodian the responsibility to value the assets in the IRA. However, the IRS does recognize that some assets are hard to value and for IRAs containing such assets the IRA custodian is to include the value of those in box 15a and place a code in box 15b indicating the type of asset (e.g., code C for a ownership interest in an LLC that is not traded on an established securities market).
The last two paragraphs are correct.
