You won't be taxed at all on the 1099-R that you rolled into the Inherited IRA account. When entering this 1099-R, enter it exactly as printed including the box 7 code. At the summary screen, click Continue and answer the follow up questions about "What Did You Do with The Money."
The RMD will be taxable, though.
What is the code in box 7 of the Form 1099-R provided by the payer?
Is the IRA/SEP/SIMPLE box marked?
Are you the surviving spouse of the deceased?
You'll have to clarify what you did and why. You can't set up and "place funds" into an Inherited IRA unless you are merely changing the custodian.
The IRAs were my sister--in-laws, I was beneficiary and moved them into an inherited IRA.
OK still need to know the distribution code and why you think you will be double taxed.
[Edit: posted before I saw answer below from dmertz.]
You won't be taxed at all on the 1099-R that you rolled into the Inherited IRA account. When entering this 1099-R, enter it exactly as printed including the box 7 code. At the summary screen, click Continue and answer the follow up questions about "What Did You Do with The Money."
The RMD will be taxable, though.
TUrboTAXperson,
the only way to get an Inherited IRA is to be listed as the beneficiary of an Inherited IRA by the Financial Institution holding the IRA.
If any of these Forms 1099-R are for a distributions from the original IRA held by your sister-in-law, because you are not the surviving spouse of the deceased, these Forms 1099-R represent distributions that were not eligible to be rolled over. Movement of an inherited IRA to another inherited IRA for the benefit of a non-spouse beneficiary can only be done by nonreportable trustee-to-trustee transfer, not be distribution and rollover. If the money was actually moved by a proper trustee-to-trustee transfer, you must ask the custodian of your sister-in-law's IRAs to issue corrected Forms 1099-R indicating that $0 were distributed. Otherwise, if these were distributed to you and the funds came under your control, no rollover was permitted and the deposit of this money into an inherited IRA is an excess contribution.
If these are only Forms 1099-R for distributions from the IRA(s) to which the funds were moved, please answer fanfare's question asking why you believe you are being double taxed.