My sister and I inherited our mother's IRA CD. We cashed it out. When we both received our 1099-R, the section that says Taxable Amount said $0. Isn't this incorrect?

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.