Yes, box 2a is the same as box 1 indicating the distribution is taxable. Box 7 is 7 (Normal Distribution) and the IRA/SEP/SIMPLE box is marked.
However, box 2b is checked as well (Taxable amount not determined). Could box 2b be checked since she made a qualified charitable distribution? This means the total in box 2b isn't taxed since the QCD is subtracted from the taxable amount.
I think you are right - the distribution is taxed. I have no idea why checking the inherited box would cause TurboTax to think the distribution isn't taxable. There must be some special case where an inherited distribution is not taxable. I was worried that I screwed up when I told her to assume the Traditional IRA as opposed to inheriting the Traditional IRA. Vanguard gave me both options and didn't mention an inherited traditional IRA could be tax exempt. Still, I don't see any circumstance where distributions from an inherited traditional IRA or an assumed traditional IRA would be tax free.
Eddie.
