It is a distribution to you in that the loss that it represents could not be rolled over to the new retirement account, so the loss had to be "paid" out to you.
The code 1 is causing TurboTax to tell you that the taxable amount of the distribution is subject to an excess-accumulation penalty. Of course with the taxable amount being zero, the penalty is 10% of zero which is zero, so the entry of this form into TurboTax has no effect on your tax return. Because this form has no effect on your tax return, you can either include it just to record it within TurboTax or omit it.
Prior to 2018 you could have entered the box-5 amount into TurboTax as an expense subject to the 2%-of-AGI limitation (those versions of TurboTax did not do this automatically), but that section is not currently present in TurboTax because of the change that I mentioned made by the Tax Cuts and Jobs Act.
