How exactly did you inherit the IRA? Were you named as a beneficiary on your friend's IRA, or did your friend's will say that you should receive a portion of the money in the IRA?
If you were named as a beneficiary the executor should have had the IRA custodian divide up the IRA and create an inherited IRA for you. It should not have been liquidated. That's why Opus 17 says that liquidating it is legally suspect.
Approximately how much money is your share of the IRA? If it's not a very large amount, then I agree with Opus 17 that it's not worth fighting about. Just pay the tax and move on.
It's not clear how you could open an inherited IRA account without a direct transfer from your friend's IRA. The account that you opened might not really be an inherited IRA. Is it actually registered as an inherited IRA with your friend named as the original owner? In any case, there does not appear to be any way that you can use that account, so you should close it.
