There appears to be nothing wrong with your tax return. Both of these transactions must be present. The distribution from the pension will be included on Form 1040 line 5a but excluded from the taxable amount on line 5b, and the word ROLLOVER will appear next to line 5b. The distribution from the traditional IRA will appear on line 4b as taxable. The result is that you have $270,000 of reportable transactions (ths sum of taxable and nontaxable income) but only $135,000 is taxable income.
