You must enter all 1099-Rs that you get. All distributions must be reported, whether they are taxable or not. Turbotax chose to show that total in the Your Income Summary page. That does not mean that the rollover is being taxed or affects your return in any way. The 401k will show on your Form 1040 Line 16A with the word ROLLOVER next to it - and that is all that happens, the rollover is not taxed and does not affect your gross income. The IRA withdrawal will show on your Form 1040 Line 15B, and that is the taxable amount that gets added to your income.
