The first paragraph addresses the reporting of the distribution from the 401(k) that was split to two destination accounts. If the distribution was directly rolled over, you should receive a Form 1099-R showing a gross distribution of $5,260 in box 1, $0 in box 2a, (probably) $5,000 in box 5 and code G in box 7.
For entry into TurboTax this Form 1099-R will need to be split into two, one showing just the portion rolled over to the Roth IRA ($5,000) and the other for the portion rolled over to the traditional IRA ($260). Boxes 1, 2a and 5 on these two forms must sum to the same amounts as shown on the form provided by the payer. (TurboTax does not support the entry of a single Form 1099-R reporting a split distribution.) The rollover from the 401(k) is reportable but nontaxable.
The distribution from the 401(k) would have been simpler had the entire $5,260 just been rolled over to the Roth IRA, not splitting the distribution. The taxable result would have been the same with less complicated reporting.
