Whatever distribution is paid to a particular beneficiary in 2019 is simply reported on that beneficiary's tax return. There are no special reporting requirements. A Form 1099-R reporting a distribution made to a beneficiary will have code 4 in box 7 to indicate that it was paid to a beneficiary. It would be a good idea for each beneficiary to keep personal notes indicating the amount each beneficiary takes in 2019 to be able to provide to the IRS in the unlikely event that the IRS ever questions whether or not the decedent's year-of-death RMD was completed.
Except for investments that are not permitted in any IRA under any circumstances (life insurance or collectibles, for example), the type of investment held in an inherited IRA (or any IRA for that matter) is irrelevant as long as the Fair Market Value of the investment can be determined and it (or proceeds from the sale of the investment within the IRA) is able to be distributed to satisfy RMDs from the IRA. In the case where the beneficiary of the IRA is the decedent's estate (apparently not the case here), it might be prudent for the executor of the estate in their fiduciary duty to shift the investments to conservative investments to avoid a loss in value prior to transferring to inherited IRAs for the benefit of estate beneficiaries, but there is no statutory requirement to do so.
