No, you should not change the code to R. You should report the form into TurboTax exactly as it appears, and include code 7 as it shows on the form. First, you cannot alter the forms; they are reported to the IRS and information must match. Secondly, as you are saying, they couldn't recharacterize the distribution.. if they had, the broker would have changed the code. Lastly, code 7 reflects distribution for 2017, not just your RMD... you will be able to indicate later in the interview that RMD was taken correctly; you will be asked if all or part was RMD and that's all you have answer.