A 8606 form has *nothing* to do with a Roth excess contribution and is not filed.
I would find a new provider since "Betterment" does not know what they are talking about and the IRS regulations.
If you actually had a loss and no earnings then:
Ignore the 1099-R and use the bottom 1099-R form type "Substitute 1099-R" (4852 form). Enter the same thing as the 1099-R you received but make box 2a equal to the earnings (zero of a loss). Enter an explanation statement and what yiun did to get the payer to correct the wrong 1099-R as you explained above and let the IRS deal with "Betterment".
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
