"So, in Turbo Tax, after entering information, it asks for :
a.) Was this a plan loan that you had when you left a job or the plan ended? I have selected "No, this was another type of distribution". The other option is "Yes, this was a qualified plan loan offset"."
TurboTax asks this question because for a qualified plan loan offset from a designated Roth account of someone under age 59½ codes 1, B and M all apply. However, only two codes are permitted on a Form 1099-R, so the IRS instructions for such a distribution indicate that the code M should be omitted, requiring TurboTax to ask this question to determine if a code M was omitted. Of course a plan loan offset cannot have a zero gross-distribution amount, so it's obvious that this was not a qualified plan loan offset. TurboTax isn't programmed quite well enough to figure that out and bypass the unnecessary question. All that said, you correctly answered No.
Regarding question b), CFR 1.402A-1 Q&A-6(b) says:
(b) If the entire account balance of a designated Roth account is rolled over to another designated Roth account in a direct rollover, and, at the time of the distribution, the investment in the contract exceeds the balance in the designated Roth account, the investment in the contract in the distributing plan is included in the investment in the contract of the recipient plan.
This regulation specifies that the rollover was to another designated Roth account, however, Treasury Decision 9324 IRS 2007-22 I.R.B.1302 which established CFR 1.402A-1 says that the same thing applies to a rollover to a Roth IRA. Because you did roll the entire balance of the designated Roth account over to the Roth IRA, this means that you should enter this Form 1099-R and indicate that you moved the money to another retirement account and that you rolled over the entire amount. Doing so will cause TurboTax to add the box-5 amount to your basis in Roth IRA contributions but will have no effect on your tax return itself. (I'm not quite sure why Fidelity did not simply include this amount in box 5 of the code-H Form 1099-R along with the amount they did include there. The amount in box 5 is permitted to exceed the amount in box 1.)
