My wife made a corrective distribution of a Roth IRA, because we were ineligible, due to income. The return of contribution included a related loss, so we actually got back less than the amount she contributed.
The IRS instructions for Form 8606 say "Also include the related earnings on your 2023 Form 1040, 1040-SR, or 1040-NR, line 4b." Does this mean that losses can reported as a negative number? Seems fair, but I don't know what the rules are.
A loss on the return of your ROTH IRA contribution would only be deductible as a miscellaneous itemized deduction, and that particular deduction is suspended until 2025 . Also, to get that deduction you would have to liquidate all of your ROTH IRA accounts, so in your case it seems it is not deductible. In either case, you cannot enter a negative number to report a loss on your ROTH IRA distribution as listed on your Form 1099-R.
[edited 3/6/24 at 11:08 AM PST] @phildonnia1