Why does code G distribution on 1099-R from 403b to an IRA cause MAGI to increase?

This increases MAGI above deductible limits ($118k) for any IRA Contribution for 2016.  On 1099-R, Box 2a is blank, 2b is blank and Total Dist has X.  Shouldn't rollover distribution be cancelled out by an equal IRA contribution as far as MAGI goes?