Given that both you and your sister were 50/50 beneficiaries, I suspect that you are not the surviving spouse of the decedent. Therefore, if the decedent's account was an IRA (IRA/SEP/SIMPLE box marked on the Form 1099-R in question), it was not permitted to be moved by distribution and rollover. Such an inherited IRA is permitted to be moved only by nonreportable trustee-to-trustee transfer and no Form 1099-R for that transfer should have been issued. If a distribution was truly made from the decedent's IRA, the distribution is entirely taxable in the same manner as it would have been had the entire amount been distributed to the decedent before death and depositing the proceeds into an inherited IRA would then constitute an excess contribution that is subject to penalty unless corrected by a return of contribution. Given that, I thin k that the appropriate thing to do would be to simply leave box 9a blank on TurboTax's 1099-R form (assuming that this was not a trustee-to-trustee transfer of an IRA in which case the financial institution needs to issue a corrected From 1099-R showing $0 distributed).
If the decedent's account was instead an account in an employer's qualified retirement plan, that would be moved only by distribution and direct rollover (codes 4 and G in box 7 of the Form 1099-R, the IRA/SEP/SIMPLE box unmarked). In that case my previous reply still stands.
I don't think that there is a bug in TurboTax. The instructions for Form 1099-R seem to imply that box 9a should be left blank if the Total Distribution box is not marked, and given that the remainder of the account was not distributed in the same single calendar year, it seems appropriate that your Form 1099-R should not have the Total Distribution box marked. In fact, whether the distribution was from an IRA or was a direct rollover from a qualified retirement plan, the instructions for Form 1099-R indicate that box 9a should be left blank whether a Total Distribution or not.
