When you entered the 1099-R, with Code 4 in Box 7, TurboTax would know that this was an inherited IRA.
The questions that follow ask about the Required Minimum Distribution for both you and your mother, as well as what you did with the remaining funds.
Inherited IRA accounts are not taxed when received, however distributions can be.
New rules are going into affect for IRA non-spouse inheritances. The account was to be depleted within 10 years, however now the beneficiary needs to make Required Minimum Distributions of their own each of those ten years as well as depleting it.
This new regulation is being waived for tax year 2024, but you must make the RMD withdrawals starting 2025.
In TurboTax, enter the 1099-R and continue through the interview.
If you report that part of the distribution was your mother's RMD, that portion will be taxable.
If you rolled over the complete balance, select No for her RMD and also for yours.
Select "I rolled it over" for "What did you do with the money"
The rolled-over balance will not be taxed.
For Tax Year 2025 and beyond, you must make your own Required Minimum Distribution yearly until this account is depleted within 10 years of your mother's passing.
We are sorry to hear of your loss.
IRS link
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