My returns were rejected today for the same reason, and I don't have an inherited IRA either! I went back and looked at my answer to the question whether my distribution was an inherited IRA, and "No" was checked. It looks like from other threads that there are a lot of people having problems between inherited IRAs (which they actually have) and Form 8606. I'm guessing TurboTax is having glitches in their 1099-R section. I'll probably try to call TurboTax tomorrow, but those other threads said they had a hard time trying to get the people to understand the problem, so they gave up.... Anyway, I'll look back here to see whether you get any answer, and you can look at my question for the same: "Returns rejected because TurboTax thinks Roth IRA conversion was an inherited IRA." --Although you have a clearer subject line! Good luck!
