Inherited IRA during COVID
Hi! So recently I realized that I massively overpaid on my taxes for 2021 and will be submitting an amended return. Before I do that however, I have kind of a complicated question to ask. I inherited an IRA from a deceased relative back in 2015, and just left it alone until 2020 when I got a notice that I was required to pull all the money out and do something with it in my own name. Apparently there's a rule about that and a 5 year limit. 2020 also happened to be pandemic year, and that money saved my butt. However, when it came time to do taxes, I wasn't sure how to file for that and was in a dark place at the time, so I didn't reach out for the appropriate help. I just followed the prompts on TurboTax and filed it under "Qualified Disaster Distributions From Traditional, SEP, SIMPLE, and Roth IRAs for the Coronavirus and Disaster(s) Listed in Item C" where the amount is taxed in thirds over 3 years. Was that the right move? Did I even need to pay taxes on it at all given that the IRS requires you to empty an inherited IRA after 5 years regardless? Would really appreciate clarification on this, thanks!
