Actually, even though it shouldn't, TurboTax does ask if a code 7D distribution is an RMD. However, TurboTax only asks this question to determine how much of the distribution is eligible for rollover to a qualified retirement plan, and, since none of a code 7D distribution is eligible for rollover, it doesn't matter how you answer this question. The code D will prevent TurboTax from asking what you did with the money regardless of how you answer this question.
TurboTax even goes on to ask if the code 7D distribution is a qualified disaster distribution, even though a qualified disaster distribution can only come from a qualified retirement account, and will flag the code 7D Form 1099-R as erroneous if you inadvertently answer that it was a qualified disaster distribution. Just one of several the traps for the unwary in TurboTax's form 1099-R section where the developers didn't quite think things through and unnecessarily creates a situation where the user can make an entry error.
