Are you sure it's showing up as taxable on 1040 line 5b? If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right.
What Code is in box 7? If it's a G that is a direct transfer and won't be taxable. It should say ROLLOVER by line 5b.
