Don't have access to a year-end pay stub but the W2 supports this.

For the year 2017, box 1, wages, tips etc $192787. Box 5 medicare wages $216787 so a difference of $24k.  Box 12 shows E - (403b) contribution of 24k which balances to medicare wages.

So it appears the contributions are pre tax?  I think I have another clue... While employed, the client's 403B was managed by investment firm "A". Upon retirement client transferred the 403B to investment firm "B". No tax implication with the transfer.

It is firm B that is issuing the 1099-R and checking the box IRA/SEP/SIMPLE and that is triggering the basis issue. Does this sound logical?