Assumed vs Inherited IRAs

[eyohonjr]

My mother assumed a traditional IRA from her deceased husband. She assumed the IRA in 2025. Her husband died in 2024. She took an RMD from the assumed IRA in 2025. 

When putting the 1099-R into TurboTax Desktop, there is an interview question "Do any of these situations apply to you?" There is a box titled "I inherited this IRA". If I check it, it looks like the distribution is not taxed. If I don't check it, the distribution seems to be taxed. 

Researching with IRS - I think the distribution should be taxed as ordinary income. 

Does anyone now what the "I inherited this IRA" box means or when it is used?

Thanks. 

Eddie.

[VolvoGirl]

What code is in box 7?   When my husband died in 2023 his IRA was moved into my IRA in only my name.   I don’t get the inherited question.   It is now mine, I don’t click on Inherited.   Only a spouse can assume it in their own name.   @dmertz 

[eyohonjr]

The distribution code in box 7 is 7 - normal distribution. 

I think an assumed IRA is taxes distributions. 

I wonder if it were inherited, would the distribution be taxed?

when I check that box, I don’t think the distribution is taxed unless it corrects later in the program. 

[dmertz]

Because this distribution came from the IRA after your mother as the surviving spouse assumed the IRA, the IRA is no longer an inherited IRA.  Do not mark the box labeled "I inherited this IRA."  Unless your mother has basis in nondeductible traditional IRA contributions, the entire distribution is taxable.

(I have no idea why marking the "I inherited this IRA" box would make TurboTax think that the distribution is nontaxable as long as box 2a has the same amount as is in box 1, which should always be the case if the code in box 7 is 7 and the IRA/SEP/SIMPLE box is marked.)