An inherited IRA with a code 4 is not eligible to be rolled over. It can only be transferred to another benificuary Traditional IRA that must remain in the deceased name with you as benificuary.
If you inherited from a spouse then you can choose to treat it as your own IRA and have the custodian of the inherited IRA move it to your own Traditional IRA - only then could you then convert your own Traditional IRA to a Roth. An inherited IRA can never be rolled over or converted to a Roth. Any money in the Roth would be an excess contribution subject to a 6% penalty that repeats every year until removed.
Also distributions form an inherited Traditional IRA that has an after tax basis cannot produce a 8606 in TurboTax because it is not in your name but in the name of the deceased and must be filed on a separate 8606 paper form attached to your mailed tax return. The after-tax basis in an inherited IRA (and 8606) must be kept totally separate from your own IRA and basis (unless you are the spouse and had it transferred to your own IRA as explained above).
**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.**
