Okay, I think this:

"Withheld for Fed & State Line 7 = 4"

translates as:

There is Fed withholding and State withholding, as well as Code 4 in box 7. Example:

"For an inherited retirement account, a Form 1099-R will typically report a "4," in box 7. If a "4" appears, it means you took a distribution from a tax-deferred retirement account and you are exempt from the early distribution penalty as the distributions were made after the original account holder's death."

I think you are telling us about a 1099-R from the Inherited account, which is only taxable prorata to that basis you told us about. Assuming your "share" is a breakdown of inheritance, there will be Math involved, for how much is taxable.

And then this person who took the Money, used it for some purpose. If that is transfer, this has nothing to do with the way the word "transfer" applies in any IRA regulation. You have Electronic Banking, not Transfer, it seems. You have a person who was entitled to keep the net from $8k minus withholding, but instead, sent it to their own Roth as that year's contribution. That is Source of the money they used, instead of (for instance) mowing lawns or selling blood to raise money to deposit into their Roth against their own earnings. That is not Rollover.

Is that the story?