"The proceeds were deposited in an Inheritance IRA within the 60 day window."
A 60-day rollover to an inherited IRA is not permitted. Such a deposit constitutes an excess contribution subject to a 10% penalty each year that the excess contribution remains in the IRA. Assuming that the deposit was made in 2023 and you filed your 2023 tax return timely, you have until October 15, 2024 to obtain an explicit return of the contribution to avoid the excess contribution penalty. If the deposit was instead made in 2024, you have until April 15, 2025 to obtain the return of contribution.
For the funds to have been deposited into an inherited IRA for your benefit, the funds were required to have been paid directly to the inherited IRA, not paid to you, in which case there would have been no reporting of this as income on the Schedule K-1.
