No, it is correct.
The inherited IRA is not taxable, but if there were earnings on it after she passed, that would be taxable to you.
There was, apparently, no taxable earnings.
TurboTaxKrisD, perhaps you are confusing this with a non-retirement CD. Traditional IRAs are usually funded with before-tax money, so any amount distributed is subject to tax as would any distribution from this decedent's IRA either before or after death. After death it is income in respect of a decedent. The code for a distribution from an inherited traditional IRA would be code 4.
So, unless the deceased had basis in nondeductible traditional IRA contributions, distributions from an inherited traditional IRA are indeed fully taxable. I suggest not relying on TurboTax's summary and checking to see if the proper taxable amount is appearing on Form 1040 line 15b or Form 1040A line 11b.
If the IRA CD was a *Roth* IRA CD, it is not taxable if the distribution was made more than 5 years after the beginning of the year for which the decedent first made a Roth IRA contribution. A distribution from a Roth IRA would be indicated by code T or Q on the Form 1099-R.
I've updated my comment to reflect the possibility that this is a Roth IRA CD, in which case it would be reasonable for the distribution to be nontaxable.
If the code in box 7 is 4 and it is not showing up as taxable, I suggest deleting and reentering the Form 1099-R, paying particular attention to the marking of the IRA/SEP/SIMPLE box.
@Loveretirement are you the same person that posted this identical question at about the same time but with a different user name?
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3901747-my-sister-and-i-inherited-an-ira-cd-when-it-came-time-for-it-to-be-renewed-we-cashed-it-out-we-both-received-a-1099r-form-that-shows-the-gross-distribution-amount-yet-it-shows-0-00-for-the-taxable-amount-is-this-a-mistake-or-we-don-t-have-to-pa">https://ttlc.intuit.com/questions/3901747-my-sister-and-i-inherited-an-ira-cd-when-it-came-time-for-it-to-be-renewed-we-cashed-it-out-we-both-received-a-1099r-form-that-shows-the-gross-distribution-amount-yet-it-shows-0-00-for-the-taxable-amount-is-this-a-mistake-or-we-don-t-have-to-pa</a>
No, it was my sister. She wanted to see if she got a different answer.
Dmertz, it was not a Roth IRA. We've decided to go to the bank and talk to the person that we dealt with to find out why the 1099-R is incorrect.
As in the answer in the other post, I suggest that you contact the payer. The IRS gets a copy of the 1099-R from the payer so what you report should match what the payer sent. In all likelihood box 2a should have the same amount as box 1 and 2b (not determined) not checked going by the box 7 code and the IRA box. However, it this was a Roth IRA, then box 2a is correct but box 7 and the IRA box is not correct. Either way I would ask the payer to be sure.