Yes, TurboTax will ask what you did with the money. After you enter the 1099-R, you want to mark that none of it was RMD. As you go through, you will mark, lump sum, rolled it over and so on through the program.
The IRS does have your 1099-R and knows it was distributed. The IRS also gets the 5498 with the contributions along with the value of your account at the end of the year. It all adds together and makes sense.
This is why your financial notebook of actual records is important.
@stuchas
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