The distribution from the traditional account in the 401(k) and from the designated Roth account in the 401(k) are entirely independent of each other even though they might be made simultaneously. Nowhere do the instructions for Form 1099-R say that one influences the reporting of the other. The instruction for code G in particular is quite clear that code G is not to be used for a rollover from a designated Roth account to a Roth IRA. There are no less than five places in the instructions for Form 1099-R that say to use code H for this rollover.
Even though the taxable result is the same, TurboTax uses the distinction to determine if the rollover adds basis to the individual's Roth IRAs tracked by TurboTax.
