Answering my own question here: In the 1099-R Input:
In the same screen, scroll down to the rollover section.
you should see "Indirect Rollovers" enter the amount "to other than a Roth IRA"
THEN if the penalty still shows up go down to Form 5329 and put reason for excluded amount from penalty - use "Other".
You will see "ROLLOVER" on the front of the 1040.
