A 1099-R is a distribution from a retirement plan. The retirement plan may have sold stock in order to distribute the money to you but it is still entered as money received from a retirement plan. Do not enter it as a stock sale.
The code '1' in box 7 indicates that this was a distribution from a retirement plan before you qualified to receive retirement income. So in addition to paying tax on this distribution you are required to pay a 10% early withdrawal penalty. That's why the system is trying to get a 2 or a 7 in that box. Those codes would remove the 10% early withdrawal penalty.
If you think that you were charged the penalty in error you need to consult with the financial institution that issued it to you and get them to revise the 1099-R.
@amandal-miller