The original question and my answer was in regard to an inherited IRA, not an inherited account in a qualified retirement plan; a distribution from an inherited IRA to a non-spouse beneficiary is indeed not permitted to be rolled over (although Congress has been discussing possible changes to the law to allow such rollovers).
kewh, the code 4G in your case indicates that the rollover was from a qualified retirement plan like a 401(k), not a distribution from an IRA. Such a rollover by a non-spouse designated beneficiary is permitted, but only as a direct rollover (indicated by the code G in this case).
