Right. You got 2 1099R. The total is 120,000 in box 1. But the rollover is code G for direct transfer and is not taxable. Don't worry about that one. It should show up on 1040 line 5a and zero taxable amount on 5b with the word Rollover by 5b. Make sure it's on line 5a.
Line 4 is for the IRA withdrawal. So 40,000 line 4b taxable is right.
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.
