If you choose to threat the Inherited IRA as your own and it is now in your name then the IRA is no longer inherited - it is YOUR IRA. Any basis that existed in the inherited IRA is simply added to your basis. When you enter the 1099-R and the question asks for your basis you simply adjust your basis to include the basis in the inherited IRA to your basis. Not complicated at all.
The fact that you have 2 1099-R's from different accounts is irreverent. For tax purposed you only have one IRA that is the total of all IRA accounts you have. After you have entered both 1099-R's the basis questions comes yo and the basis applied to the total IRA distribution regardless of the number of 1099-R's.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
