The distribution from the IRA is taxable and is taxable as ordinary income and is entered into TurboTax by entering the Form 1099-R.
If the MRD was done as an in-kind distribution of the securities, the cost basis of the securities outside the IRA would be the value on the date of distribution from the IRA and the holding period for capital gains would begin on that date, as if you had purchased the securities on the date of distribution. The subsequent sale of the securities would be reported separately on a Form 1099-B as non-covered securities for which you would have to supply the basis and holding period (long-term or short-term) when entering the Form 1099-B into TurboTax.
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