You are correct. If it is inherited (and you name and SSN indicated that the trustee of the account recognizes you as the beneficiary) then a code 7 is improper. It should be a code 4. A code 7 implies that it is "your" account, not your fathers.
It should also have your fathers name on the 1099-R with you as beneficiary. Inherited retirement accounts must remain in the name of the deceased.
Contact the payer for a corrected 1099-R.
**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.**
