My method does result in the proper total Gross distribution amount and Pension Taxable amount on schedule 1040. I will carefully monitor any error conditions that arise. If any errors are flagged, I'll probably revert to your suggested method.
Keep in mind that if the step-by-step method was not used in tax form completion
, the 1099R for this type of rollover would be manually filled out exactly as I described. It appears to me that the 1099R section for Rollovers, Roth Conversions, etc. was created to handle this exact situation of a split conversion from a 401K to both a Roth and IRA. In my opinion, the real issue here is that the step-by-step questions do not adequately support the automatic completion of this type of 1099R conversion.
