Ah, that explains it. The nothing about an inherited IRA goes anywhere on the Form 8606 for your own IRAs. If there is basis in the inherited IRA, the pro rata calculation would need to be done on it's own Form 8606 outside of TurboTax and the resulting taxable amount entered into TurboTax during entry of that Form 1099-R. TurboTax then substitutes this taxable amount into box 2a of TurboTax's form for lack of anywhere else to track it. (You can enter it directly in box 2a of TurboTax' s form yourself.) Your filed tax return should then include the Form 8606 prepared outside of TurboTax, which requires paper filing.
