"Should Line 7 of the 8606 include distributions from a Beneficial IRA?"
No. After entering the details of the code-4 Form 1099-R TurboTax will present a page where you need to indicate that the IRA was inherited. (Odd that TurboTax does not just go by the code 4, but that's the way TurboTax works.)
"should Beneficial IRA's be included in the Year End Values?"
No. Everything about an inherited IRA (except an IRA inherited by the surviving spouse who chooses to treat the IRA as the surviving spouse's own) must be kept entirely separate from the individual's own IRAs.
