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Retirement tax questions
"I realize that I have to start taking RMD on the inherited IRA this year based on the OLDEST's beneficiaries age."
Only if there was no designated beneficiary on the IRA, otherwise each beneficiary will use their own age as long as the original inherited IRA is split into separate IRAs, one for each of the designated beneficiaries.
Q1: On your mother's tax return, report as the required amount of RMD only the amount that was actually taken. The remainder of the RMD became the responsibility of the beneficiaries and not your mother's responsibility upon her death. Your mother's tax return should not include Form 5329.
Q1: When preparing your own tax return, similarly indicate that the amount required was the amount that you received. This will similarly prevent Form 5329 from being prepared.