Are you sure that you are being taxed on $16k? Both amounts are income under the tax code, but only the distribution from the IRA is taxable income since the distribution from the 401(k) was rolled over to the traditional IRA.
TurboTax's summary shows both taxable and nontaxable income. Examine Form 1040 lines 15b and 16b or Form 1040A lines 11b and 12b to see that only $8k is included in your taxable income.
